By: Jamie Azevedo
Anticipatory releases have always been around, and they seem to grow longer every day to encompass any possible nuance of liability. They are often in electronic form, can be time-consuming to review, and require a releasing party to move through several screens and check various individual waiver boxes agreeing to specific terms before moving on. But how far do these waivers go?
In Oregon, while anticipatory release agreements are not favored, nor are they always invalid.(1) The viability of the anticipatory release rests largely on the procedural or substantive unconscionability of the agreement rather than the agreement’s particular effect on the injured party themselves.(2) Procedural unconscionability involves the conditions of the contract and generally focuses on two issues: oppression and surprise. Substantive unconscionability, on the other hand, refers to the terms of the contract and relates to whether an agreement is so one-sided as to be unconscionable.(3)
The court considers both procedural and substantive unconscionability in determining the enforceability of a release. Relevant procedural factors include: 1- conspicuousness or unambiguity in terms; 2- difference in bargaining power between parties; 3- whether the release involves a meaningful opportunity to negotiate or is offered on a take-it-or-leave-it basis; and 4- whether the release involves a consumer transaction. Substantive considerations may include: 1- whether enforcement of the release agreement could cause a severe or inequitable result for the releasing party; 2- whether the released party serves an important public service or interest; and 3- whether the agreement attempts to release more than ordinary negligence.(4)
In a consumer transaction between an individual and a corporation, evidence of procedural unconscionability is often fairly easy to demonstrate—the disparity in bargaining power is obvious, and contractual waivers are often offered in take-it-or-leave it terms.(5) However, simple disparity in bargaining power does not necessarily invalidate a release.
Substantive unconscionability is often stickier and considered more significant. Specifically, in premises liability cases, business owners owe a duty to maintain premises in a reasonably safe condition and to take reasonable action to protect a customer against unreasonable risks of harm.(6) Depending on the services offered, businesses are viewed as being in the best position to foresee and control hazards. In reviewing anticipatory release agreements for the potential of an inequitable result for the releasing party, courts may be reluctant to allow the enforcement of an agreement which immunizes a business from liability where it had a superior ability to guard against the risk. Further, a business’s potential ability to absorb and spread the costs associated with insuring against risks will also be considered.(7)
While anticipatory releases disclaiming only ordinary negligence are more generally accepted, whether any particular release will stand against challenge will vary on a case-by-case basis.(8) In some situations, an activity might be heavily dependent on a releasing party’s own ability to assess their physical abilities to guard against the risk of harm, and in those cases, procedural inequity in the agreement’s formation might be less concerning.
While there are no perfect terms that work in every situation, the drafter creating an anticipatory release should be sure to identify the specific activities involved, as well as the risks inherent in those activities. In addition, a release agreement should ensure that a releasing party must acknowledge review and awareness of those risks, and this can be done by creating terms to be specifically checked or initialed by a releasing party as accepted. The drafter should also make terms conspicuous and clear, not convoluted with extensive legal jargon. Clarity, visibility, specificity, and a recognition of limitations in a release may go a long way toward its viability.
1. K-Lines, Inc. v. Roberts Motor Co., 273 Or 242, 248 (1975).
2. See Bagley v. Mt. Bachelor, Inc., 356 Or 543, 552 (2014).
3. Motsinger v. Lithia Rose-Ft, Inc. 211 Or App 610, 614, 617 (2007).
4. Bagley, 356 Or at 556, 560.
5. See id. at 555.
6. See Moorehead v. Tri-County Metro. Transp. Dist. Of Or., 273 Or app 54, 68 (2015), rev den, 358 Or 550 (2016).
7. Bagley, 356 Or at 567, 570.