Is the waiver of liability on the back of my ticket enforceable?

September 9th, 2016 by


 

ticketsIn Wisconsin, probably not. Those waivers on the back of baseball, amusement park, or concert tickets are one form of exculpatory contracts. An exculpatory contract is a “contract clause which releases one of the contracting parties from liability for his or her wrongful act.”[1] Recreational businesses, in particular, utilize exculpatory contracts as a way to try and limit liability or to prevent litigation. For example, I was required to sign an exculpatory contract in which I promised not to sue the last time I went ice skating. Some exculpatory contracts, however, do not even require a signature. Instead, they are placed on the back of most admission tickets—ticket to a basketball game, amusement park, concert, etc. In those instances, one need not sign anything to waive liability; one only need to purchase the ticket. That is, the act of purchasing the ticket is all that is needed for an agreement to form between the parties in which one promises not to sue the other in the event of an injury. Accordingly, businesses, especially those that engage in recreational activities, often rely on exculpatory contracts to limit liability, or to prevent litigation.

Not all states permit the use of exculpatory contracts and the states that do, typically disfavor such agreements. For example, while Wisconsin allows businesses to use exculpatory contracts to limit liability, Wisconsin courts rarely enforce such agreements because they excuse conduct otherwise understood to be below the acceptable standard of care. Put differently, because exculpatory contracts excuse conduct otherwise understood to be below acceptable standards of care, Wisconsin courts disfavor these types of agreements, and accordingly, these agreements rarely withstand judicial inquiry.

When determining whether to enforce an exculpatory contract a court will analyze the agreement both in light of contract law principles and public policy. Meaning that even if the exculpatory contract withstands a contractual inquiry, and is thus valid with respect to contract law; the court may nevertheless, conclude that the contract is unenforceable on public policy grounds. Public policy is a principle of law under which freedom of contract is restricted by law for the good of the community. For example, if I enter into an agreement in which I promise to beat up your neighbor for five hundred dollars, no court will enforce such contract if you decide not to pay me. No court will enforce such a contract because it is against public policy to enforce agreements in which individuals contract to inflict bodily harm on a third party. Similarly, most exculpatory contracts are struck down for public policy reasons; that they excuse conduct otherwise understood to be below acceptable standards of care.

To determine whether an exculpatory contract is valid with respect to contract law a court will look to the contract itself. Generally speaking, an exculpatory contract that is overly-broad or all-encompassing will not withstand the contractual inquiry and will be deemed invalid with respect to contract law. In my ice skating example, if the exculpatory contract I signed specifically referenced injury from falling thought the ice, and I fell through the ice, then the contract would likely be deemed valid with respect to contract law since it specifically covers the activity at issue—my falling through the ice. In other words, in such instance, the contract will not be viewed as overly-broad or all-encompassing since it specifically covers injury by falling through the ice. Accordingly, in such instance, the court would deem the contract valid with respect to contract law, and proceed to analyze the contract with respect to public policy. Under public policy, a contract that aims to shield a party from liability for harm caused intentionally or recklessly will be automatically unenforceable on grounds of public policy. Thus, only after an exculpatory contract is able to withstand both a contractual analysis and a public policy analysis will it be deemed enforceable in Wisconsin.

While exculpatory contracts can be used by businesses to limit liability in Wisconsin, these types of agreements are often unenforced by courts on public policy grounds. Thus, for a business to maximize its chances of limiting liability through the use of exculpatory contracts, such contracts need to be drafted in light of both contract law and public policy principles because that is precisely how the court will review such agreements.

 

 

 

[1] Keith Bruett, Can Wisconsin Businesses Safely Rely Upon Exculpatory Contracts to Limit Their Liability?, 81 Marq. L. Rev. 1082 (1998).

[2] Atkins v. Swimwest Fam. Fitness Ctr.,  277 Wis.2d 303 (Wis. 2005).