By Doyice Cotten
There is much confusion and misinformation about adhesion contracts as they relate to the enforceability of liability waivers in recreation, fitness, and sport activities. There is a common misconception that adhesion contracts are against public policy and subsequently unenforceable.
What is an Adhesion Contract?
An adhesion contract is a “standardized contract which is imposed and drafted by the party with superior bargaining power and which relegates the subscribing party only the option of signing the contract or rejecting it” (i.e., allowing no opportunity to bargain) (Westlye v. Look Sports, Inc., 1993). That definition certainly fits most liability waivers used in recreation, fitness, and sport activities. However, the belief that such adhesion contracts are not enforceable is simply incorrect.
In a Massachusetts case (Brush v. Jiminy Peak Mountain Resort, 2009), the court indicated that, in Massachusetts, recreation-related waivers are not adhesionary because the activity is not an essential service. Contracts of adhesion are sometimes against public policy, but generally those involving recreation, fitness, and sport are not ruled contrary to public policy since clients are under no compulsion to sign and may seek such services elsewhere. A Colorado court held that because a waiver is on a printed form and offered on a take-it-or-leave-it basis does not make it unfair – particularly when similar services may be obtained elsewhere (Espinosa v. Arkansas Valley Adventures, LLC, 2014).
In a California case (Schoeps v. Whitewater Adventures LLC, 2005) brought by a woman who had signed a whitewater rafting waiver, the court stated that the most oppressive aspect of the situation was that, had she not signed, she might have been left without transportation in an isolated area. The court recognized that she had only a few minutes to decide whether to sign the waiver and would have lost her pre-paid ticket price had she refused to sign. However, the court felt that this was not sufficient to constitute oppression or lack of a meaningful choice, particularly since the brochure had stated that a waiver was required.
Patrons of recreation, fitness, and sport activities are under no compulsion to make use of these specific opportunities – a health club patron can patronize another provider or can improve his or her fitness by other means. There are two instances in which an adhesion contract can be deemed unenforceable. The first is when the service in question is deemed to be essential in nature (e.g., medical care, education, common carriers). This can create a decisive bargaining advantage and result in a legitimate public policy issue . The second circumstance in which an adhesion contract can be against public policy and be unenforceable is when the contract is unconscionable.
What is an Unconscionable Contract?
Black (1990) defined an unconscionable contract as a contract that (because of stronger bargaining power of the other party) is so grossly unfair to one of the parties that no man in his senses would agree to it. A waiver may be found to be unenforceable if it is deemed unconscionable. There are two aspects that make an agreement unconscionable – procedural unconscionability and substantive unconscionability (both of which must be present). Procedural unconsionability exists when a party lacks a meaningful opportunity to agree to the clause terms because of 1) unequal bargaining power, 2) an adhesion contract, and 3) its effects are not readily discernible. Substantive unconsionability focuses on the one-sidedness of the contract terms. These two requirements comprise a high bar in ruling a waiver to be unconscionable. Consequently, courts generally rule that recreation, fitness, and sport waivers are not unconscionable.
A Pennsylvania court, in determining that a waiver was not unconscionable, considered if the contract 1) was voluntary, 2) involved the economic well-being of the signer, and 3) involved a recreational activity (Martin v. Montage Mountain, 2000). A Tennessee appellate court upheld a waiver signed by an adult student who was injured in a motorcycle riding class. The fact that she had paid a non-refundable $200 tuition before she was informed that a waiver would be required did not make the waiver unconscionable (Maxwell v. Motorcycle Safety Foundation, Inc., 2013). Maxwell had read and understood the waiver – and had not objected to the waiver when she signed it.
The fact is that liability waivers are almost always adhesion contracts; however, adhesion waivers for recreation, fitness, and sport activities are rarely, if ever, unenforceable for that reason. Such a contract is unenforceable, however, if it is deemed to be unconscionable. Again, recreation, fitness, and sport liability waivers rarely meet the stiff requirements necessary to be ruled unconscionable.
Finally, it should be noted that what constitutes public policy in a state is state law – and that obviously varies by state. In a few states, the public policy is that most, if not all, waivers are against public policy and unenforceable.