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Dailey v. Sports World South

9/30/2003

f we uphold the release as valid, it does not apply to this incident because the release applies only to the instruction Tabriz received from Rick Duffy during Part I of the scuba-diving course and did not apply to the direction he received from other instructors. But according to the language in the exculpatory clause, Tabriz agreed to release his instructors, Scuba World, and all of their "respective employees." Thus, although Schibel and Nelson's names are not specifically listed on the release signed by Tabriz, they are released from liability as employees of Scuba World.


Affirmed.


ROBERT H. SCHUMACHER, Judge (dissenting)


I respectfully dissent. I believe the exculpatory clause at issue here is unenforceable because it is ambiguous, does not comport with fundamental contract principles, and is against public policy.


If an exculpatory clause"is either ambiguous in scope or purports to release the benefited party from liability for intentional, willful or wanton acts, it will not be enforced." Schlobohm v. Spa Petite, Inc., 326 N.W.2d 920, 923 (Minn. 1982). Here, the clause's final paragraph in capital letters claims to prevent students from recovering for any injury "however caused, including, but not limited to, the negligence of the released parties." (Emphasis added.) I find it difficult to imagine how a clause that specifically states it is"not limited to negligence" does not purport to release the respondents from liability for intentional willful or wanton acts. The clause is unenforceable, regardless of whether or not there is a claim for willful or wanton conduct in this case.


A contract must conform to the basic fundamentals of contract law. A contract is the result of a bargained-for exchange where both sides exercised good faith and fair dealing. In re Hennepin County 1986 Recycling Bond Litig., 540 N.W.2d 494, 502 (Minn. 1995) (holding"every contract includes an implied covenant of good faith and fair dealing"); Cederstand v. Lutheran Bhd., 263 Minn 520, 530, 117 N.W.2d 213, 220 (1962) (stating"a contractual promise [must] be the product of a bargain"); Restatement (Second) of Contracts §§ 17 and 205 (1981). Good faith, at a minimum, excludes actions that violate community standards of decency, fairness, or reasonableness. Restatement (Second) of Contracts § 205 cmt. a (1981).


Subterfuge, evasion, and"abuse of power to specify terms" are some examples of bad faith. Id. cmt. d. I believe if Scuba Center wishes to shield itself from its own liability, the release should be honestly and legitimately negotiated. See Turnbough v. Ladner, 754 So.2d 467, 469 (Miss. 1999) (holding exculpatory clauses that are not"fairly and honestly negotiated and understandingly entered into" are invalid (quotation omitted); Schmidt v. United States, 912 P.2d 871, 875 (Okla. 1996) (stating that exculpatory clause is only valid from bargained-for exchange"on a level playing field" where level varies according to seriousness of the contract's subject matter and options available to injured party). Allowing Scuba Center to ignore the most basic rules of contract law does not support"freedom of contract."


The case at hand is indicative of why exculpatory clauses must be fairly and honestly negotiated and understood by both parties. Tabriz was presented with a pre-printed"Liability Release and Express Assumption of Risk" form, which he was required to sign in order to participate in the certification process. There is no evidence that any negotiation took place regarding other options such as paying more money to participate without the clause. Furthermore, the release is evasive and fails to adequately state significant dangers. The release

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