By Doyice Cotten
Author’s Note: It is rare that a court clearly defines and explains waiver law in a state. The Oregon Supreme Court made an effort to explain both the law and their reasoning; and, unlike many courts, explained the law in an understandable manner. The reader is urged to read the entire case. Much can be learned from the opinion. From the opinion, it would seem that the Oregon Supreme Court is moving closer to the restrictive stances held by courts in Wisconsin, Connecticut, and Vermont. Waivers are not prohibited per se, but enforcement may become less frequent.
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Waivers have been consistently enforced in Oregon appellate courts and U.S. District Courts; however, no cases have been found in which the Oregon Supreme Court ruled on a sport or recreation waiver. Appellate courts have held that waivers are enforceable so long as there is no violation of public policy. The Landren v. Hood River Sports Club, Inc., (2001) court required that a waiver 1) must be bargained for, 2) must be called to the attention of the signing party, and 3) be conspicuous. The Silva v. Mt. Bachelor, Inc. (2008) court held that a waiver is governed by contract law principles and will be enforced if there is no public policy violation and the waiver is not adhesionary; the court added that a contract is not adhesionary if the activity is participated in voluntarily and if no essential services are involved.
In a recent case (Bagley v. Mt. Bachelor, Inc., 2014), the Oregon Supreme Court addressed the enforceability of “anticipatory releases” (waivers) in Oregon. The case involved a snowboarder who was injured at the resort. While both the trial court and the appellate court found for the defendant, ruling the waiver to be enforceable, the Supreme Court decided to revisit the issue of the validity of exculpatory agreements – having not comprehensively addressed the issue in several decades.
After analysis of rulings by courts in other states, the court listed several relevant procedural factors as well as several relevant substantive factors in determining whether enforcement of a waiver would violate public policy or be unconscionable.
Procedural Factors
- whether the release was conspicuous and unambiguous;
- whether there was a substantial disparity in the parties’ bargaining power;
- whether the contract was offered on a take-it-or-leave-it basis; and
- whether the contract involved a consumer transaction.
Substantive Factors
- whether enforcement of the release would cause a harsh or inequitable result to befall the releasing party;
- whether the releasee serves an important public interest or function; and
- whether the release purported to disclaim liability for more serious misconduct than ordinary negligence.
The Court noted that
Nothing in our previous decisions suggests that any single factor takes precedence over the others or that the listed factors are exclusive. Rather, they indicate that a determination whether enforcement of an anticipatory release would violate public policy or be unconscionable must be based on the totality of the circumstances of a particular transaction. The analysis in that regard is guided, but not limited, by the factors that this court previously has identified; it is also informed by any other considerations that may be relevant, including societal expectations.
THE ANALYSIS
The court next addressed the Procedural Factors:
- Plaintiff does not contend that the release was inconspicuous or ambiguous; the plaintiff does not contend surprise or lack of clarity – thus this factor weighed in favor of the enforcement of the waiver.
- The Court held that the parties were not equals – that the agreement was between a commercial enterprise and a patron with inferior bargaining power.
- The Court further held that the agreement was a take-it-or-leave-it agreement with no opportunity to negotiate for different terms or pay an additional fee to protect against provider’s negligence.
- The fourth factor, that it was a consumer transaction, was apparent.
Factors 2, 3, and 4 weighed in favor of prohibiting enforcement of the waiver; adding additional weight was the fact that 1) there are a limited number of ski areas that provide downhill skiing and snow-boarding opportunities in Oregon, and 2) all providers require similar waivers. Thus the plaintiff had no meaningful alternative to defendant’s take-it-or-leave-it terms.
The Court then considered the Substantive Factors:
- In determining whether enforcement of the release would cause a harsh and inequitable result to befall the releasing party, the Court concluded that
the result would be harsh because, accepting as true the allegations in plaintiff’s complaint, plaintiff would not have been injured if defendant had exercised reasonable care in designing, constructing, maintaining, or inspecting the jump on which he was injured. And that harsh result also would be inequitable because defendant, not its patrons, has the expertise and opportunity to foresee and control hazards of its own creation on its premises, and to guard against the negligence of its employees. Moreover, defendant alone can effectively spread the cost of guarding and insuring against such risks among its many patrons.
- The Court next addressed whether the defendant serves an important public interest or function. This was important because the Court has not previously addressed this issue as it pertains to a recreational activity.
The Court stated that
It is true that ski areas do not provide the kind of public service typically associated with government entities or heavily regulated private enterprises such as railroads, hospitals, or banks . . . However, like other places of public accommodation such as inns or public warehouses, defendant’s business premises—including its terrain park—are open to the general public virtually without restriction, and large numbers of skiers and snowboarders regularly avail themselves of its facilities. To be sure, defendants’ business facilities are privately owned, but that characteristic does not overcome a number of legitimate public interests concerning their operation.
The Court concluded that the defendant’s business operation is sufficiently tied to the public interest as to require the performance of its private duties to its patrons. Factors 1 and 2 weighed in favor of the prohibition of the enforcement of the waiver, however the following factor favored enforcement.
3. The Court then addressed the third factor — whether the release purported to disclaim liability for more serious misconduct than ordinary negligence. The Court noted that the waiver claimed only to protect against liability for ordinary negligence and that there were no allegations of actions beyond ordinary negligence.
SUMMARY REGARDING THIS CASE
| The Court concluded that enforcing the waiver would be unconscionable. The deciding factors were the disparity in bargaining power, a consumer transaction, and the take-it- or-leave-it condition. In addition, the Court found it substantively unfair and oppressive because it was 1) harsh and oppressive and because 2) the business was open to the general public and the safety of the patrons was of broad societal concern (thereby affecting the public interest).To determine unconscionability, the Court considered whether the procedural and substantive considerations outweigh defendant’s interest in enforcing the release at issue here. The Court considered the defendant arguments that 1) “in light of the inherent risks of skiing, it is neither unfair nor oppressive for a ski area operator to insist on a release from liability for its own negligence;” and 2) “denying enforcement of such a release improperly elevates premises liability tort law above the freedom to contract, fails to take into account the countervailing policy interest of providing recreational opportunities to the public, fails to recognize that certain recreational activities are inherently dangerous and fails to consider the fact that the ski area operator has little, if any, control over the skier/snowboarder.”The Court acknowledged that the defendant’s arguments had some force, and agreed that some of the factors weighed in favor of the defendant. Nevertheless, the Court emphasized the release is very broad; it applies on its face to a multitude of conditions and risks, many of which (such as riding on a chairlift) leave defendant’s patrons vulnerable to risks of harm of defendant’s creation. Accepting as true the allegations in plaintiff’s complaint, defendant designed, created, and maintained artificial constructs, including the jump on which plaintiff was injured. Even in the context of expert snowboarding in defendant’s terrain park, defendant was in a better position than its invitees to guard against risks of harm created by its own conduct. The Court went on to say “It is axiomatic that public policy favors the deterrence of negligent conduct” and quoted an Alabama court which stated “human experience shows that exculpatory agreements induce a lack of care.” Subsequently, the Court ruled that factors favoring the enforcement of the waiver were outweighed by the factors opposed to enforcement; it ruled the waiver unenforceable and remanded the case to the trial court.
SUMMARY REGARDING WAIVERS IN GENERAL By footnote and in the opinion, the Court stated:
2. Nothing in our previous decisions suggests that any single factor takes precedence over the others or that the listed factors are exclusive.
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