What the heck is an exculpatory clause?

February 11, 2013

pps

Ron Golden

Ron Golden

  • Attorney, Counsel to AOPA
  • More than 30 years of aviation legal experience
  • Serves on the Board of Directors, Seaplane Pilots Association
  • Pilot since 1975, owns a Cessna Cardinal RG

Through the Legal Services Plan, we review agreements for aircraft rental, hangar rental, aircraft tiedowns, etc. It seems to me in recent years, these agreements include releases more frequently.

I remember overhearing discussions some 30 years ago between individuals about signing such a release agreement. In essence, the advice was to “sign it and don’t worry about it because it will never hold up in court.” The point of this note is to report that the law is changing, and more than ever these releases are being enforced.

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For example, a Maryland case involved an individual who signed up for membership in an exercise and fitness facility (the “Club” for simplicity). The individual was not in good physical condition. The Club indicated that it employed “certified fitness, clinical exercise and health specialists” and “promised to provide programs … appropriate for your … fitness level… .” As part of the application process, the individual completed and signed a Club document titled a Participation Agreement. This Participation Agreement included language stating that the individual would “… release and discharge [the Club] from all claims, demands, injuries, damages, actions, or courses of action, and from all acts of active or passive negligence on the part of [the Club] its servants, agents or employees.” The application was accepted and the individual became a member of the Club.

A Club employee then performed an evaluation of the individual and provided instructions in the use of the Club equipment. During this process the individual claims to have suffered physical injuries requiring shoulder surgery. The individual sued the Club claiming that the employee had been negligent in performing the training. For our purposes, the important part of the case involves the Club’s defense arguing that the exculpatory clause contained in the Participation Agreement released the Club from liability for the injuries even if caused by the employee’s negligence. The individual responded that the exculpatory clause should be void.

It might surprise some of you to know that the release was upheld and the Club prevailed in the litigation. Some of the language in the decision should be instructive to us.

First, the court noted that the release must be clear and unambiguous. The court found that this release expressed “a clear intention by the parties to release [the Club] from liability for all acts of negligence.”

Next, the court noted a couple of exceptions. For example, “… when the party protected by the clause intentionally causes harm ….” So, the “released” party may not rely upon a release if they have intentionally injured someone.

The court indicated that “In Maryland, unambiguous exculpatory clauses are generally held to be valid in the absence of legislation to the contrary.” The court also stated, “In reaching this conclusion, we are in accord with the holding in cases decided in a number of other jurisdictions.” The court described examples from Illinois, Georgia, and Minnesota.

This is not to imply that all releases will be upheld. The law varies from state to state. Even in Maryland there are circumstances where releases will not be upheld. However, you should be careful about assuming that releases will not be upheld in court. That assumption may not be correct.

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Ron Golden