This article was taken from Waivers & Releases of Liability 7th ed. and updated for SportWaiver.com. Click SportWaiver for a limited time special price on the book.
By Doyice Cotten
It was just a few years ago that most professionals in recreation, sports, and fitness thought that liability waivers were worthless. Now, of course, most understand that waivers can provide liability protection for the service provider in most states.
There are still a lot of erroneous ideas regarding waivers. Articles and books frequently point out weaknesses in waivers and the fact that waivers do sometimes fail to protect. Waivers indeed do fail often for a number of reasons – one of the most common being that many are poorly written and ambiguous. One erroneous reason given is they fail because a waiver 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) Waivers used by providers of recreation, fitness, and sport activities are certainly adhesionary; however, contrary to popular opinion, an adhesion contract is fully enforceable absent the presence of two judicially imposed limitations. The first is that the contract must fall within the reasonable expectations of the weaker or adhering party and the second is that the contract must not be unduly oppressive or unconscionable under the applicable principles of equity. (Heilig v. Touchstone Climbing, Inc., 2007) 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.
Many states consider a contract adhesionary only if it applies to an essential service. In a Massachusetts court (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.
In a California case (Schoeps v. Whitewater Adventures LLC, 2005) regarding 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, they felt that this is not sufficient to constitute oppression or lack of a meaningful choice, particularly since the brochure had stated that a waiver was required.
An unconscionable contract is a contract that is so grossly unfair to one of the parties, because of stronger bargaining power of the other party, that no man in his senses would make. A waiver may be found to be unenforceable if it is deemed unconscionable. Both procedural and substantive unconscionability must be present in order for an agreement to be deemed unconscionable. There is procedural unconscionability 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 ascertainable from a review of the contract. Substantive unconscionability focuses on the one-sidedness of the contract terms.(Burnett v. Tufguy Productions, Inc., 2010)
Courts generally rule that recreation and sport waivers are not unconscionable. The New Jersey Supreme Court in Stelluti v. Casapenn Enterprises, Inc. (2010) stated that they use a sliding scale involving how the contract was formed and whether public interest is involved. A Pennsylvania court, involved in determining the document 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)
Recreation, sport, and fitness waivers are adhesionary, but are unenforceable only if they are so unreasonable and one-sided as to be considered unconscionable.