Why a Waiver May Fail – Public Policy

One of the most common reasons that a waiver fails when challenged in court is that it violates the public policy of the state. Often readers are puzzled by the term “public policy” and ask, “Just what is public policy?” This concept is quite broad and is not easily defined or explained.horse jump

Black’s Law Dictionary states that public policy is “… that general and well-settled public opinion relating to man’s plain, palpable duty to his fellowmen, having due regard to all circumstances of each particular relation and situation.” One court defined public policy as “that principle of law under which ‘freedom of contract or private dealings is restricted for the good of the community” (Merten v. Nathan, 1982).

An act that concerns much of the public and is not in the best interest of the public as a whole would be deemed against public policy. An automobile manufacturer requiring purchasers of all vehicles to sign a waiver releasing them of all responsibility for negligent construction would involve much of public, would involve a necessity for many, and could reduce the motivation of the manufacturer to produce a safe vehicle. For a recreation example, one state holds that waivers protecting ski resorts from liability for negligence and required of all skiers involves a significant number of citizens (the public as a whole), thus it violates public policy. On the other hand, if the same resort requires a waiver for a ski competition for superior skiers (a small portion of the public as a whole), the general public is not affected and public policy is not violated.

Courts in most states do not find waivers relating to participation in recreation, fitness, and sport activities to be against public policy because allowing such waivers enables providers to offer more activities to the public.  However, what is against public policy varies from state to state and some of the most important exceptions are addressed below.

Statutory Duty

One may not contract away a statutory duty. Many states have broad statutes that disallow the use of waivers for personal injury.  A Louisiana statute [La. Civ. Code Ann. Art. 2004 (West 1987)] reads “Any clause is null that, in advance, excludes or limits the liability of one party for causing physical injury to the other party.” Likewise, a Montana statute (MCA 28-2-702) provides that waivers of liability for negligent injury are against public policy. A Hawaii statute [Haw. Rev. Stat. 663-1.54(a), (b) (Supp.2002)] prohibits enforcing waivers of liability for negligence for businesses providing recreational activities to the public. New York has a very important statute (N.Y. General Obligations Law sec. 5-326) that disallows any release of liability for negligence in places of amusement or recreation when the owner receives a fee or other compensation.

Courts in other states have held that the use of waivers in conjunction with certain sports or activities violates the public policy of that state. Vermont courts (Dalury v. S-KI-I, Ltd., 1995; Umali v. Mount Snow, Ltd., 2003), for instance, have recognized a broad public policy exception for recreational facilities such as ski areas that hold their premises open to the public. Courts in other states have taken similar stands. A few of them are: Alaska , Connecticut, Idaho, North Carolina (ski resorts and skier), California (child care providers and swimming pool health),  Massachusetts and New York (health club contracts), West Virginia (whitewater guides), Florida (boat rental safety statutes). In each of these states, providers of the select services are prohibited by statute from avoiding liability for ordinary negligence.

The Supreme Court of New Mexico (Berlangieri v. Running Elk Corporation, 2003) has ruled that the state Equine Liability Act prohibits the use of waivers for equine activities.  The Act provides:

“B. No person, corporation or partnership shall make any claim against . . . rider, owner, operator, trainer or promoter for injury, loss or damage resulting from equine behavior unless the acts or omissions of the rider, owner, operator, trainer or promoter constitute negligence. [emphasis added]”

The court felt that the Legislature intended to express in general terms a public policy that operators should be held accountable for their own negligence, recklessness, and intentional conduct.

In a Tennessee case (Teles v. Big Rock Stables, 2006), Teles fell while riding and alleged that the saddle was faulty with stirrups too long for her legs. She had signed a waiver releasing the stable of all claims whether “due to THIS STABLE’S and/or ITS ASSOCIATES ordinary negligence.” The defendants claimed exemption from liability under the Tennessee Equine Activities Act and based on the waiver. Under Tennessee law, one may contract away liability for negligence. There are, however, two exceptions: one may not contract away liability for willful or gross negligence and a party cannot contract away liability if the duty is a public one. In this case, the waiver did not release the liability for violation of a statutory duty. T.C.A. 44-20-104  (1)(A) specifies that nothing shall prevent the liability of an equine sponsor who “Provided the equipment or tack, and knew or should have known that the equipment or tack was faulty, and such equipment or tack was faulty to the extent that it did cause injury”.

Gross Negligence/Willful and Wanton Misconduct

Courts in most states hold that a waiver intended to protect a provider from liability for gross negligence, reckless misconduct, or willful and wanton misconduct violates the public policy of the state. Some define ordinary negligence as the failure to act as a reasonably prudent person would act under the circumstances. Most states distinguish between ordinary negligence and gross negligence and define gross negligence as an extreme form of negligence in which one fails to use the care that even a careless person would use.  Reckless misconduct is usually considered to involve more extreme conduct than gross negligence, while willful and wanton misconduct is generally regarded as the most extreme form of negligence.

The table below lists states where courts in at least one jurisdiction have enforced a waiver of liability for either gross negligence or reckless misconduct in at least one case. The courts in Florida and Kentucky have said that such waivers will not protect against intentional acts and the court in Pennsylvania stated that a waiver will not protect against gross negligence unless the waiver language specifically names gross negligence. In Illinois, a waiver will protect against liability for gross negligence, but not for reckless misconduct or willful and wanton acts. In spite of these rulings, the author does not have a high degree of confidence that courts in these states would enforce such a waiver again. Total reliance on any waiver is risky and reliance on a waiver to protect one from liability for an injury resulting from an extreme act of negligence is foolhardy. A wiser course would be to make every effort to avoid negligent actions, regardless of a waiver.

States that Have Enforced Waiver for Acts

Exceeding Ordinary Negligence[1]

States Enforcing Waivers in at Least One Case

For Gross Negligence

State that has Enforced a Waiver

For Reckless Misconduct

Florida     Illinois       Kentucky      N.Carolina   Pennsylvania

West Virginia

It is common practice for plaintiffs to allege gross negligence or one of the other extreme forms of negligence, knowing that most jurisdictions do not enforce waivers when the conduct exceeds ordinary negligence. In some jurisdictions, the court will enforce the waiver if the plaintiff provides no evidence supporting the gross negligence claim; however, in other jurisdictions, the court will reject summary judgment and send the case to trial based on the mere allegation.

In the previously mentioned Teles v. Big Rock Stables, Big Rock had Mrs. Teles ride a horse using a saddle with stirrups that were too long for the rider even when stirrups were set at their shortest length. The court said that it was possible for a reasonable jury could find that the defendants willfully disregarded the safety of Mrs. Teles because they knew the stirrups were too long and that falling was probable.

Unequal Bargaining Power

Courts in many states hold that waivers between parties of unequal bargaining power are against public policy. Many plaintiffs allege the waiver was adhesion contract because the provider offered it on a “take it or leave it” basis and there is no opportunity to bargain. Most courts hold that adhesion contracts are enforceable so long as they are not oppressive or unconscionable and do not involve an essential service. Courts have ruled that recreation providers do not have greater bargaining power because the participant has the option to refuse to sign the waiver and go elsewhere for the activity or to participate in a different type of activity.

Two policies may be employed to make waivers more resistant to such claims. One is to provide an option to the signer – sign the waiver or avoid the waiver by paying a substantially greater fee to participate. A second policy is to provide a refund to would-be clients who have pre-paid for the service and refuse to sign a waiver.

Employer – employee contracts (waivers) are not generally enforceable because of the obvious advantage in bargaining power in that the bargain involves the livelihood of the employee. In some cases, courts have enforced such waivers when the employee was a part-time employee or received a very nominal salary.

A Final Note

This article has addressed how public policy can prevent the enforcement of waivers. It is important to keep in mind, however, that not all public policy prohibits the use of waivers. A New Jersey court held that auto racing operators could contract away safety requirements. The public policy favors the enforcement of waivers in a number of states. In Wisconsin and Georgia, courts have held that waivers are valid absent specific legislation prohibiting them. In Tennessee, courts do not construe waivers against the relying party; and in Massachusetts and Connecticut, the law favors their enforcement.  Courts have ruled that waivers for sport or recreational events are not against public policy in South Carolina and Oregon,   In fact in some states (including Kentucky, Kansas, and Alabama), the courts have held that waivers promote public policy by making it possible for providers to offer more recreation to the public.

[1] Theis v. J & J Racing Promotions, 571 So.2d 92 (Fla. App. 2 Dist. 1990); Borden v. Phillips, 752 So.2d 69 (Fla. 2000); Maness v. Santa Fe Park Enterprises, Inc., 700 N.E.2d 194 (Illinois, 1998); Donegan v. Beech Bend Raceway Park, Inc., 894 F.2d 205 (6th Cir. [Ky.] 1990; Couglin v. T.M.H. International Attractions, Inc., 1995 U.S. Dist. LEXIS 12499 (Ky.); Valeo v. Pocono International Raceway, 500 A.2d 492 (Pa., 1985); Nicholson v. Mount Airy Lodge, Inc., 1997 U.S. Dist. LEXIS 21035; Barber v. Eastern Karting Co., 1996 Md. App. LEXIS 40 (W.Va. law); Brown v. Robbins, 2007 N.C. App. LEXIS 2271 (Court states that service providers may protect themselves from liability for their own gross negligence by waiver.

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