By Alexander “Sandie” Pendleton
Waivers have failed, at least in part, due to the failure of the signer to have an opportunity to bargain over the terms of the contract. (Atkins v. Swimwest Family Fitness, 2005) Several tactics have been suggested to prevent a waiver from being adhesionary or unconscionable due to the lack of opportunity to bargain.
On the issue of bargaining, importantly, the Atkins decision talks in terms of “the form itself must offer the opportunity for bargaining” (para.25). Unfortunately, the Wisconsin courts have yet to explain exactly what that means, or how that can be accomplished. Given the Wisconsin courts’ traditionally hostile attitude toward waivers, a “robust” approach to the issue of bargaining may be required (that is, if a recreational provider wants to have any hope of convincing a Wisconsin court that its waiver form meets the “bargaining” factor discussed in such cases as Atkins).
One such robust approach would be for the provider in the waiver form to give the prospective participant two options, one that gives the participant a “regular” price (that also involves the participant signing a full waiver), and another option that gives the participant a substantially higher price (which would enable the individual to participate without having to sign any waiver). Figure 1 sets forth an example of a “participant’s option” paragraph that uses this “two option” approach.
Reportedly, several Wisconsin-based recreational-opportunity providers have adopted this approach in their waiver forms, and although terms and prices vary, very few patrons take advantage of the higher price option.
In addition to the approach illustrated in Figure 1, there are other ways to address this issue that might be equally as, or even more, effective. One of the things that courts do not like about waivers is their concern that if courts enforce waivers recreational providers will no longer have an incentive to take reasonable steps to safeguard participants (see, e.g., Arnold, p. 209 n.2). Courts also do not like the “all-or-nothing” approach of many waiver agreements. One way to assuage these concerns would be to adopt a more nuanced or balanced approach to the waiver agreement than has typically been used. For example, instead of using the “all-or-nothing” approach that most waivers use, a facility and/or its lawyer could create a variation of the approach set forth in Figure 1, one in which the facility would offer a “full waiver at the regular” price option, and a second option, one entailing a “partial waiver at a higher price”; this second option, for instance, might involve an agreement or waiver form:
- Waiving all waivable-by-law claims, except for those claims involving catastrophic injuries (death or permanent paralysis), and in the event of such a claim agreeing to waive all claims for damages against the released parties in excess of $500,000.
The benefit to the facility owner (and its insurer) of such an approach would include: (a) the possibility of some increased revenue to the facility, based on the number of participants who opt for the higher admission price option; (b) some increased probability that if a serious claim occurs, the total damages recoverable will be capped; and (c) an increase in the likelihood that a court in the more common non-catastrophic case will enforce the waiver, and fully bar that claim, based on the fact that a “genuine” option was provided to the participant.
Online Insurance Opportunity
Online registration processes could conceivably give providers options that they previously did not have. For example, events like marathons or triathlons could make it easy for a participant to obtain “race insurance.” As part of the online registration process, the race organizer could provide a link to an insurer that would for a relatively low cost (e.g., $20), sell a race insurance policy to the participant. Such a policy would be comparable to “flight insurance” that travelers can purchase for a particular flight, and would provide certain limited amounts of coverage to the participant, in the event the participant died or was seriously injured while participating in the race. Evidence that:
(a) a race organizer went to the trouble to ensure that all racers (including a subsequently injured racer) had an easy and relatively-affordable means by which to obtain insurance coverage, and
(b) the subsequently injured racer voluntarily chose not to take advantage of that option, would likely help an organizer in its efforts to convince a court to enforce a full waiver signed by an injured racer.
Of course, even though there would be benefits associated with such nuanced or more-balanced approaches, such approaches would also involve some expense, because waiver agreements using such an approach would need to be carefully drafted, and a provider using such an approach would need to consult or work with insurance providers.
 This “two option” approach (among others) was first suggested by Wisconsin attorney Alexander “Sandie” Pendleton in his article Enforceable Exculpatory Agreements: Do They Still Exist?, 78 Wis. Law. 10 (Aug. 2005) (article available online).
Alexander “Sandie” Pendleton is a shareholder with the Milwaukee law firm of Kohner, Mann & Kailas, S.C. and is the leader of the firm’s Sports, Fitness and Recreational (S/F/R) Team. Sandie has over twenty years of experience counseling clients involved in sports and recreational activities, including power sports activities, and is a frequent speaker and writer on recreational liability issues. To learn more about Sandie and the KMK S/F/R Team, visit .releaselaw.com.