Oregon Supreme Court voids liability waiver

By Allen Eraut, Claude Bosworth and Kevin Clonts

A recent decision by the Oregon Supreme Court could have a sweeping effect on the use of standard liability waivers. In Bagley v. Mt. Bachelor, Inc. the court invalidated as unconscionable and against public policy a release of liability provision in a season pass ski agreement.  The plaintiff, an experienced snowboarder, was paralyzed while snowboarding in the defendant’s ski area.  The season pass issued by the defendant included a “release and indemnity agreement” which required the pass holder to release the defendant from any claim for injury, including any injuries caused by the defendant’s negligence.  The agreement further stated that the plaintiff accepted the “inherent risks of skiing.”  Signs posted at the defendant’s ski lift terminals stated in all capital letters, “your ticket is a release.”

 

The trial court granted the defendant’s motion for summary judgment based on the release, and the Oregon Court of Appeals affirmed.  But the Oregon Supreme Court reversed, finding that public policy considerations supported invalidating the release.  The Supreme Court first acknowledged the importance of enforcing contracts, and further acknowledged that the defendant’s release was conspicuous and unambiguous.  The defendant argued that the release did not violate public policy either, because operating a recreational ski area is not an “essential public service.”  The court rejected defendant’s argument, holding that the release was both procedurally and substantively unconscionable.  The release was procedurally unconscionable because the defendant had greater bargaining power, and offered the release on a take-it-or-leave-it basis.  The release was substantively unconscionable because the result of foreclosing any claim for the defendant’s negligence was harsh, and business operators have a heightened duty to make their premises safe.  The court noted that a business operator is in the best position to protect the public against premises hazards and to purchase insurance to protect against risk. 

The full opinion can be accessed at the link below:

http://www.publications.ojd.state.or.us/docs/S061821.pdf.

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