by Luke Baumstark
For many of us, being asked to sign contracts and other documents is something we encounter more frequently that we would prefer. Many of these contracts have sections which seek to release other parties from liability for various things, including injuries to our persons or damage to our property. These sections are sometimes known as exculpatory clauses, limitations of liability, and waivers of liability, among other terms. In the interest of simplicity, we will simply call them “releases” in this article.
We usually don’t notice these releases, because they are often buried in the “small print” of contracts that we see for things like gym memberships and apartment leases. They can even appear on receipts for valet parking or at a garage. These releases typically say that the gym, valet company, parking garage, or landlord is not liable for any injury or damage that occurs on their property or through the use of their equipment.
What many of us may not realize, is that some of these releases may be invalid and/or unenforceable. In other words, although they may say that the signer releases the other party from liability, they may not actually prevent an injured party from recovering. Unfortunately, discerning valid, enforceable releases from invalid ones can require a trained eye. Missouri courts review a number of factors in testing the validity of these releases, and can refuse to enforce them for a number of reasons.
First, Missouri law expressly prohibits releasing others from liability for conduct that is willful or intentional, grossly negligent, or involves the public interest. See e.g. Khulusi v. Sw. Bell Yellow Pages, Inc., 916 S.W.2d 227, 230 (Mo. Ct. App. 1995), Warner v. Southwestern Bell Telephone Co., 428 S.W.2d 596, 603 (Mo.1968), and Tobler’s Flowers, Inc. v. Southwestern Bell Tel. Co., 632 S.W.2d 15, 17 (Mo.App.1982). One cannot “sign away” the right to sue over injury or damages caused by these types of conduct, and any release purporting to immunize another party for these kinds of acts should be found unenforceable.
Second, although Missouri courts recognize that it is possible to release others from liability for their own negligence (as opposed to “gross negligence,” as noted above), they do not favor these types of releases. Alack v. Vic Tanny Int’l of Missouri, Inc., 923 S.W.2d 330, 334 (Mo. 1996). Citing Rock Springs Realty, Inc. v. Waid, 392 S.W.2d 270, 272 (Mo.1965). (emphasis added). This means that such releases are to be “strictly construed against the party claiming the benefit of the contract.” Alack, 923 S.W.2d at 334. Citing Hornbeck v. All American Indoor Sports, Inc., 898 S.W.2d 717, 721 (Mo.App.1995). (emphasis added).
Releases against liability for negligence can risk being invalidated in several ways. One is by not being worded clearly enough. See Alack, 923 S.W.2d at 334. It is a “well-established rule of construction that a contract provision exempting one from liability for his or her negligence will never be implied but must be clearly and explicitly stated.” Id. Citing Poslosky v. Firestone Tire and Rubber Co., 349 S.W.2d 847, 850 (Mo.1961). Missouri courts have repeatedly invalidated releases which were unclear in seeking to absolve parties of liability for negligent conduct.
Another thing that can render a release ineffective is its location within the document. It is well settled law in Missouri that an exculpatory clause must be conspicuous. Spalding v. Bally Total Fitness Corp. 2005 WL 2138239, 3 (Mo.App. W.D. Mo., 2005) (unpublished case). Citing Lewis v. Snow Creek, Inc. 6, S.W.3d 388, 395 (Mo.App. W.D. 1999). Quoting Alack, 923 S.W.2d at 335. (“[A] provision that would exempt its drafter from any liability occasioned by his fault should not compel resort to a magnifying glass and lexicon.”). Therefore, exculpatory clauses and releases that are “hidden” within lengthy contracts or are otherwise difficult to see also run the risk of being invalidated.
A third way that a release can lose its power is if a court finds it to be “unconscionable.” Under Missouri law, an unconscionable contract is one that “no man in his senses, not under delusion, would make, on the one hand, and which no fair and honest man would accept on the other.” Fuller v. TLC Prop. Mgmt., LLC, 402 S.W.3d 101, 114 (Mo.App. S.D., 2013). Citing Hume v. U.S., 132 U.S. 406, 10 S.Ct. 134, 136, 33 L.Ed. 393 (1889). Considered hand-in-hand with this is the “sophistication” of the parties to the contract – in other words, their ability to understand what they are signing. See e.g. Easley v. Gray Wolf Investments, LLC, 340 S.W.3d 269, 273 (Mo.App. E.D. 2011).
With all of the factors involved with interpreting releases of liability, analyzing how they interplay with each other can seem like a daunting task. So, if you’ve suffered an injury because of someone else’s negligence, but think that you can’t bring suit because of a release, waiver, or other contract or agreement that you signed, you may want to consult an experienced litigator before you give up on being compensated and chalk up the experience as a loss. Similarly, if you are a business owner or landlord, and believe that you have a release in place that makes you immune from suit, it may be worthwhile to have an experienced litigator review it, so you know what to expect in the event of an accident on your premises.