OREGON
Likelihood of Enforcement: Moderate
A. Pre-Injury Liability Waivers
Under Oregon law, liability waivers “are not favorites of the courts but neither are they automatically voided.” Bagley v. Mt. Bachelor, Inc., 340 P.3d 27, 44 (Or. 2014) Contracts that limit liability for negligence are enforceable in Oregon only if they do not violate public policy “as expressed in relevant constitutional and statutory provision and in case law,” and are not unconscionable. Id. at 34. Since there has been “convergence” between Oregon courts’ analysis of public policy concerns and unconscionability, the distinctions between the two are fuzzy. Id. at 35.
A liability waiver always violates public policy and is unconscionable where it “purports to immunize the releasee from liability for gross negligence, reckless, or intentional conduct.” Id. at 44. Additionally, Oregon courts are reluctant to enforce liability waivers where the party escaping liability “perform[s] an important public service.” Real Good Food Store, Inc. v. First Nat. Bank of Or., 557 P.2d 654, 656 (Or. 1976) (holding that a bank could not enforce an exculpatory agreement and identifying common carriers and utility companies as other examples of companies that perform a public service).
In Bagley v. Mount Bachelor, Inc., the Oregon Supreme Court provided some procedural and substantive factors that courts should consider in determining whether enforcing pre-injury liability waiver would “violate public policy or be unconscionable.” 340 P.3d at 38. The procedural factors include “[1] whether the release was conspicuous and unambiguous; [2] whether there was a substantial disparity in the parties’ bargaining power; [3] whether the contract was offered on a take-it-or-leave-it basis; and [4] whether the contract involved a consumer transaction.” Id. The substantive factors include “[1] whether enforcement of the release would cause a harsh or inequitable result to befall the releasing party; [2] whether the releasee serves an important public interest or function; and [3] whether the release purported to disclaim liability for more serious misconduct than ordinary negligence.” Id. This test is a flexible one: courts must consider the “totality of the circumstances” as no “single factor takes precedence over the others,” and courts may be informed “by any other considerations that may be relevant, including societal expectations.” Id.
The Bagley court’s application of these procedural and substantive factors to a tort claim involving a skiing accident has significant implications for consumer transactions. First, the court found that a commercial enterprise has “superior bargaining strength” over a consumer. Id. at 39.; cf. K-Lines, Inc. v. Roberts Motor Co., 541 P.2d 1378, 1384 (Or. 1975) (concluding that a “[d]isparity in bargaining power does not exist” between two commercial entities despite difference in resources). This imbalance, combined with the fact that the defendant offered the contract on a “take-it-or-leave-it basis” and evidence that the plaintiff could not escape the liability waiver while skiing as other ski areas in Oregon required similar waivers, was sufficient to establish “some quantum of procedural unconscionability.” Bagley, 340 P.3d at 39-40 (quoting Strand v. U.S. Bank Nat. Ass’n, 693 N.W.2d 918, 925 (N.D. 2005)). Furthermore, the Bagley court said it was not dispositive that skiing is not essential public service. Id. at 43. Instead, the court focused on whether “a harsh and inequitable result would follow if defendant were immunized from negligence liability, in light of (1) defendant’s superior ability to guard against the risk of harm to its patrons . . . and (2) defendant’s superior ability to absorb and spread the costs associated with insuring against those risks.” Id. at 45.
Other cases have provided more guidance about when a liability waiver is sufficiently conspicuous and unambiguous to be enforceable. A liability waiver’s intent “to provide immunity from the consequences of a party’s own negligence” must be “clearly and unequivocally expressed, and . . . an ambiguous instrument . . . will be construed against the party who drafted it.” Transamerica Ins. Co. v. U.S. Nat’l Bank, 558 P.2d 328, 333 (1976). However, the clause does not necessarily need to “specifically mention negligence.” Estey v. MacKenzie Eng’g Inc., 927 P.2d 86, 89 (Or. 1996).
If enforcing the contract would lead to “harsh or inequitable results,” Oregon courts are more likely to conclude that the parties did not intend a vague or broadly worded clause to waive negligence claims. Id. at 88; see also S. Pac. Co. v. Layman, 145 P.2d 295, 298 (Or. 1944) (finding clause that indemnified railroad “against any and all loss, damage, injury, cost and expense of every kind and nature, from any cause whatsoever” to be ambiguous where a farmer would have to bear the risk of “ruinous liability” if the clause applied to negligence); Am. Wholesale Prod. v. Allstate Ins. Co., 406 P.3d 163, 167 (Or. Ct. App. 2017) (enforcing clause releasing both parties from “any loss or damage caused by water damage” against negligence claim where “no harsh or inequitable result” would arise from enforcement).
B. Waivers Signed By Parents on Behalf of Minor Children
It is not clear under Oregon law whether a pre-injury liability waiver signed by a child’s parent or guardian is enforceable. The Oregon Supreme Court found a liability waiver void as against public policy where the waiver was signed after an accident but before the child’s injuries manifested. Ohio Cas. Ins. Co. v. Mallison, 354 P.2d 800, 802 (Or. 1960) (“[T]here is a real danger that the child’s interest will be put in jeopardy because of the parent’s concern over his or her own economic interests.”). However, other states have declined to extend similar conflict of interest reasoning to pre-accident liability waivers. See, e.g., Zivich v. Mentor Soccer Club, Inc., 696 N.E. 201 (Ohio 1998) (concluding that no similar conflict between parent and child exists for pre-injury liability waivers).
Last updated 03/2022
This assessment of the enforceability of waivers has been prepared by non-lawyer law students and does not constitute legal advice.