Enforceability of Exculpatory Clauses in Hazardous Recreational Activities
| Publication year | 1998 |
| Pages | 8 |
| Citation | Vol. 11 No. 1 Pg. 8 |
Gary L. Johnson, J.
People come to Utah from all over the world to climb mountains, raft rivers, ski our slopes[1] and ride horses and mules down canyon trails. These are hazardous recreational activities, and those who engage in them should know that they are climbing, paddling, skiing, or riding into their own potential set of harmful possibilities.
Utah recognizes that parties not engaged in public service[2] may properly bargain against liability for harm caused by the ordinary negligence in the performance of contractual duty. The exception to this rule is if the harm is wilfully inflicted or caused by gross or wanton negligence. Russ v. Woodside Homes, Inc., 905 P.2d 901, 904 (Utah Ct. App. 1995). These types of exculpatory clauses are often described as hold harmless agreements, disclaimers, releases, covenants not to sue, waivers, limitations of liability or limitations of damages. These contractual provisions take three forms:
1.Releasing Liability. Parties may contract to release a party from potential liability after injuries have occurred, e.g., insurance settlement agreements. Utah courts have held that such releases are valid when their language is unambiguous and unequivocal.[3]
2. Shifting Liability. Parties may contract to shift potential liability from one party to another, e.g., indemnity provisions designed to allocate the risk of loss or injury resulting from a particular adventure. It is the law in Utah that indemnity agreements, like releases, are valid only if the contract language clearly and unequivocally expresses the parties' intent to indemnify one another.[4]
3. Avoiding Liability. Parties may contract to avoid a party's potential liability before injuries have occurred. Often described as exculpatory clauses, such provisions relieve one party from the risk of loss or injury in a particular transaction or occurrence and deprive the other party of the right to recover damages for loss or injury. "Such exculpatory or hold harmless provisions may release parties from liability for their ordinary negligence."[5]
The Utah Court of Appeals noted in Woodside Homes that our courts apply the same tests to contracts that release, shift or avoid potential liability for negligence. "When the intent to relieve a party from liability for alleged negligence is clearly and unequivocally expressed in a contractual provision, we will enforce that provision." Id. at 905. The Woodside Homes court then noted that Utah's rule for enforcing release, indemnity and exculpatory agreements has been articulated as follows:
[T]o constitute a clear unequivocal expression of intent to indemnify for a party's own negligence, an indemnity agreement need not contain specific language to that effect; rather, the language and purpose of the entire agreement, together with the surrounding facts and circumstances, may provide a sufficiently clear and unequivocal expression of the parties' intent. Id., citing Healey v. J.B. Sheetmetal, Inc.. 892 P.2d 1047, 1049 (Utah App. 1995). Outside of skiing, there is a dearth of Utah state appellate case law addressing the application of a release/hold-harmless agreement within the context of hazardous recreational activity. There are Utah state district court cases, cases, from the United States District Court for the District of Utah and from surrounding states that have addressed the enforceability of releases for injuries resulting from people engaged in hazardous recreational activities. A review of those cases will be helpful in understanding the enforceability of exculpatory clauses.
HORSEBACK RIDING
In Heil Valley Ranch, Inc. v. Simkin, 784 P.2d 781 (Colo. 1989), plaintiff Simkin arrived at the Heil Valley Ranch to go horseback riding with a group of friends. Before any of the participants in the ride were allowed to mount their rented horses, they were required to come into the ranch's office and sign a release of liability. The release required the participant to acknowledge that the riding of horses involved a I risk of physical injury and that any horse ' might act or react unpredictably at times and that was an inherent risk assumed by the horseback rider. Id. at 782.
Plaintiff Simkin mounted a horse but was holding the reigns too tight, causing the horse to rear up and fall backwards upon her. She sued Heil Valley for negligence and breach of warranty. Heil Valley raised the release in an affirmative defense and moved for summary judgment, which t he district court granted. The Colorado Court of Appeals reversed, finding that the release was not clear and unambiguous. The Colorado Supreme Court then took up the issue. Id. at 783.
The Colorado Supreme Court began its analysis by noting that exculpatory agreements have been viewed with disfavor, but that such agreements "are not necessarily void, however, as long as one party is not at such obvious disadvantage and bargaining power that the effect of the contract is to put him at the mercy of the other's negligence." Id. at 784. The court then went on to state the following test for determining the validity of an exculpatory agreement:
In determining whether an exculpatory agreement is valid, there are four factors which a court must consider: (1) the existence of a duty to the public; (2) the nature of the service performed; (3) whether the contract was fairly entered into; and (4) whether the intention...
To continue reading
Request your trial