Exculpatory Clauses

Organizations, business entities, property owners, and recreational facilities oftentimes attempt to limit their liability, or extinguish it altogether, by having their customers, patrons, and members sign contracts with "exculpatory" language that purports to release them from any responsibility for accidents and injuries that may result on their property, and even from their own negligence. Such clauses, which may appear in contracts, applications, release forms, etc. are called "exculpatory clauses". It is unknown what type of chilling effect those clauses may have on those injured by the negligence of others, but who simply don't attempt to pursue their claim under the potentially mistaken belief that their signing of a contract, release, or application with such language bars any claim they may have.

In Florida, exculpatory clauses are certainly valid contractual provisions. However, they are disfavored and will be strictly construed against the party claiming to be relieved of liability. Theis v. J. & J. Racing Promotions, 571 So.2d 92 (Fla. 2d DCA 1990). An exculpatory clause may release a party from liability arising out of its own negligence, but to do so, the clause must clearly state that it releases the party from liability for his own negligence. Whether it so clearly states that it releases the party from liability for its own negligence is something that is battled over frequently in our court system. The clause must manifest a clear and unequivocal intention to be relieved, and the "wording must be so clear and understandable that an ordinary and knowledgeable party will know what he is contracting away." See Southward & McGill, P.A. v. S. Bell Tel. & Tel. Co., 580 So.2d 628 (Fla. 1st DCA 1991).

In Murphy v. Young Men's Christian Association (YMCA) of Lake Wales, 974 So.2d 565 (Fla. 2d DCA 2008), the Second District Court of Appeal recently held that an exculpatory clause that appeared in a membership application, also called a waiver of liability clause, did not clearly and unequivocally release the YMCA from liability for its own negligence. The YMCA membership language, while in one portion did clearly state that by signing it, the member would agree to release the YMCA from liability for "any claims based on negligence," the application also said in another portion that "even when every reasonable precaution is taken, accidents can sometimes still happen..." The court found that the language in the YMCA membership application was confusing because it implied that the YMCA would take every reasonable precaution to prevent accidents from occurring. In that regard, a reasonable reader could reach the conclusion that the waiver of liability clause extends only to claims for injuries that were unavoidable even when every reasonable precaution had been taken by the YMCA. Accordingly, the court ruled that the waiver of liability clause was unenforceable in light of the "every reasonable precaution" language.

The end result was that an injured YMCA member, who in this instance had sustained serious injuries while using exercise equipment at the YMCA, and who had incurred in excess of $200,000 in medical expenses, is now free to pursue her personal injury claims against the YMCA; and that pursuit is no longer barred due to the flawed waiver of liability language in the membership application.

The decision reached by the Second District Court of Appeal in Murphy was certainly the just and proper decision. The wording of the membership application was not so clear and understandable that an ordinary and knowledgeable individual would know what they are giving away when signing a document that contains such language. In many instances, an ordinary and knowledgeable individual may not even be aware that such language is included in a document as seemingly benign as a membership application. The Murphy decision is a significant decision because it holds organizations, business entities, property owners, and recreational facilities (whose exculpatory agreements are undoubtedly crafted by legal counsel and/or liability insurance consultants) to the standard of clearly communicating the fact that by signing the agreement, the party will be releasing the other from its own negligence, without inserting anything to that agreement that is inconsistent with same.

Whether intentional or not, the membership application in Murphy, as a whole, did not contain the required, clear and understandable communication. While one section of the application arguably did clearly contain the waiver language, the other contained language that could lead to the contrary expectation that the YMCA would take every reasonable precaution to prevent accidents. If not for Murphy, a party could conceivably craft an agreement that in one section contains an exculpatory clause, but in another contains language that may give rise to a contrary expectation. The Florida legislature should not attempt to enact any legislation that purports to chip away at the very basic premise pronounced in Murphy, of providing this clear and understandable communication, without ambiguity or deception.

Michael J. Vitoria, Esq.

Gunn Law Group, P.A.

Comments

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