Exclusions of Liability and Consumer Protection Legislation


From time-to-time, I will comment on legal developments in consumer protection that have implications for the e-commerce environment. On March 15, 2012, the British Columbia Court of Appeal released its decision in Loychuk v. Cougar Mountain Adventures Ltd., which establishes that complete waivers of liability for personal injury in recreational activities may be enforceable under British Columbia’s Business Practices and Consumer Protection Act (“BPCPA”), even if the plaintiffs do not understand at the time of booking the activity that a waiver will be required.


The plaintiffs reviewed the website of the defendant and booked a zip-line adventure. The plaintiffs were injured when they collided on a zip-line operated by the defendant. According to the court’s reasons for judgment, the defendant admitted that its employees had been negligent (there had been miscommunication between the guides leading the zip-line tour).

The defendant relied on a waiver of liability that the plaintiffs signed prior to participating in the adventure. The waiver was a one-page document. It had a warning at the top indicating that by signing the document the plaintiffs would waive certain legal rights, including the right to sue or claim for compensation following an accident. In the body of the waiver, the plaintiffs released all claims for any loss, damage, expense or injury, including death, due to any cause whatsoever, including negligence, breach of contract, or breach of any statutory or other duty of care, and including the failure on the part of the releasees to take reasonable steps to safeguard or protect the plaintiffs from the risks, dangers and hazards of participating in the zip-line activities.

Each of the plaintiffs had had prior experience with signing releases in the context of recreational activities. One of the plaintiffs was the owner of a business that offered kickboxing programs for women in which waivers of liability were used. The other plaintiff had previously signed a waiver in connection with the renting a kayak.

Issues for the Court of Appeal

In the Court of Appeal, the plaintiffs argued:

  1. The waiver was unconscionable at common law;
  2. The waiver was unenforceable under the provisions of the BCPBCA; and
  3. There was no consideration in exchange for the signing of the waver.


The court, following the Supreme Court of Canada’s decision in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), held that whether the waiver of liability was enforceable depended upon it three-step analysis:

  1. Did the release covered in the injury in issue? There was no debate that this step was satisfied.
  2. Was the exclusion of liability was unconscionable at the time of the contract with the defendant was entered into?
  3. Was there was any overriding public policy reason that would permit the plaintiff to avoid the exclusion of liability?

To succeed on the second step (unconscionability), the Court of Appeal held that the plaintiffs had to demonstrate that there was (1) inequality of the parties arising from the ignorance, need or distress of the weaker and (2) substantial unfairness. The court concluded that there is no power imbalance where a person wishes to engage in an inherently risky recreational activity, simply because that activity is controlled or operated by another person. Nor was it unfair for an operator to require a waiver as a condition of participation.

Regarding the third step (public policy), the court rejected the argument that the fact that the zip lining activity was totally within the control of the operator meant that the operator could not disclaim liability as a matter of public policy. The court held that if there were policy reasons why releases for injuries in recreational activities that are freely entered into should not be enforced that was a question for the Legislature. The relevant public policy issues for the court were whether the defendant knowingly placing the public in danger or was reckless as to whether it was doing so. These factors didn’t apply.

Consumer Protection

For the purposes of the appeal, the court assumed that the BPCPA applied.

The plaintiffs argued that the defendant had engaged in unconscionable or deceptive acts and practices and for that reason the waiver was unenforceable. In particular, the plaintiffs relied on paragraph 8(3) of the BPCPA, which directs the court to consider whether “the terms or conditions on, or subject to, which the consumer entered into the transaction were so harsh or adverse to the consumer as to be inequitable”. The court held that this provision did not lower the standard to be met before a contract would be set aside on the basis of unconscionability. The court would not set aside the release merely because it was arguably “inequitable” – it had to be unconscionable.

The plaintiffs also alleged that there had been deceptive advertising, which rendered the waiver void. In particular, the plaintiffs relied on a statement from the “Frequently Asked Questions” page on the website. In response to the question about the safety of the zip line activity, the defendant describes the engineering construction and certification of the zip line and did not mention the risks inherent in its operation. The court rejected this argument. First, there was nothing to indicate that the plaintiffs were aware of or relied on the statement. Second, and more importantly, the court held that the website statement could not be inferred as representation of anything other than a statement of the infrastructure.

Lack of Consideration

The plaintiffs’ final argument was that the waivers lacked consideration. The plaintiffs argued that they had entered into their contracts prior to having signed the waivers. One of the plaintiffs argued that the contract was complete when she made the reservation using her husband’s credit card. The other plaintiff argued that the contract was entered into when her friend made the reservation for the group. The court held that it was bound by prior decisions of the court and found that permission to continue an activity or to commence an activity constituted immediate and fresh consideration capable of supporting the waiver. It was “immaterial” whether the plaintiffs had read the statement on the website that participants would be required to sign a waiver.

Categories: Canada, Consumer Protection, E-Commerce


DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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