Tatting on Exculpatory Clauses Under Minnesota Law: Uncertain Shields Against Liability
High risk activities (such as those at health clubs, ski resorts, skydiving companies, horse stables, paintball facilities, etc.) routinely require the participant to sign a waiver before participating in the activity. The exculpatory clauses in these waivers, while intended to alleviate liability in the event of an accident, do not always achieve this purpose. Such clauses are presumptively disfavored by judges and, even more so, by juries. Nevertheless, when properly drafted, exculpatory clauses can minimize or even eliminate the claim of an injured participant. Attorney Troy Tatting takes a look at this significant topic and provides practical guidance to both plaintiff and defense attorneys facing the prospects of litigating a case in which the enforceability of an exculpatory clause may dictate the outcome. He writes:
Minnesota case law on exculpatory clauses is still developing, but courts have adopted some basic rules. The rules are conflicted, providing hope for both plaintiff and defense attorneys. On one hand, an exculpatory clause is valid as long as (1) it is not ambiguous in scope; and (2) it does not exonerate the benefited party from liability for intentional, willful or wanton acts. On the other hand, exculpatory clauses are disfavored and strictly construed against the benefited party. They are also void if they violate public policy considerations.
. . . .
Advise your clients about the public policy test. The test examines (1) whether, at the time of contracting, there was a disparity of bargaining power between the parties, and (2) if the type of service being offered is a public or essential service. A disparity of bargaining power exists where an adhesion contract is drafted by a business and forced on an unwilling or unknowing public “for services that cannot readily be obtained elsewhere.” To establish a disparity in bargaining power, a party must show that there was no opportunity for negotiation and that the services could not be obtained elsewhere.
If your client is one that provides a public or essential service, such as a common carrier, hospital, public utility or innkeeper, among others, courts will not enforce its exculpatory clause. A public or essential service includes a service generally thought suitable for public regulation. Recreational activities generally do not fall into the categories of public or essential services.
(footnotes omitted)