This past year, exculpatory waivers had their moment in the sun as businesses and educational institutions raced to put waivers in place to protect against claims stemming from the COVID-19 pandemic. A Minnesota Court of Appeals decision published this week, Carter Justice v. Marvel, LLC d/b/a Pump It Up Parties, provides clarity and confidence for the Minnesota businesses and educational institutions that utilize waivers for persons under 18. In an issue of first impression, the appellate court held that an exculpatory waiver signed by a parent on behalf of his or her minor child is binding on the child after the child becomes an adult. The court also reinforced the standard for determining whether a waiver is enforceable under Minnesota law and the effect of an overly broad waiver.
Carter Justice was seven years old when his mother signed a form agreement, which included an exculpatory clause releasing defendant Marvel LLC’s business, an indoor amusement facility, from any and all claims she and her son might have based on his use of inflatable amusement equipment. When using the equipment, Justice fell off of an inflatable obstacle course, injuring his head. Fast-forward 11 years, and Justice, now 18 years old, commenced an action for negligence against Marvel. Marvel moved for summary judgment, invoking the pre-injury exculpatory clause his mother signed. The trial court agreed with Marvel and dismissed the case.
Justice appealed, arguing that a parent does not have authority to agree to a pre-injury exculpatory clause on behalf of a minor child and that any such agreement is not binding on the child after he becomes an adult. The Minnesota Court of Appeals, recognizing the issue as one of first impression, held that a parent is authorized to sign, on behalf of his or her minor child, an exculpatory clause that releases a negligence claim against a third party. If the exculpatory clause is valid and enforceable, it is binding on the child even after the child becomes an adult. This decision sets Minnesota apart from the many states that do not enforce parental waivers of minors’ claims.
Having determined that Justice’s mother had the authority to bind him to a waiver, the court went on to consider whether the waiver itself was enforceable. Waivers in Minnesota may be unenforceable if they are contrary to public policy. The court applied a two-prong test that focuses on (1) whether there was a disparity of bargaining power between the parties to the contract and (2) the types of services being offered or provided (specifically, whether it is a public or essential service). As to prong one, the court found there was no disparity in bargaining power because the provision of inflatable amusement equipment is not a necessary service and Justice was not compelled to play on the equipment. As to prong two, the type of service was recreational and not a service of great importance to the public (like a hospital, common carrier or public utility). Thus, the exculpatory clause did not violate public policy.
Although the waiver did not violate public policy, the court found that it was overbroad as written. Exculpatory clauses in Minnesota are unenforceable to the extent they purport to release a party from anything more than ordinary negligence (that is, intentional or willful acts). The clause at issue purported to release Marvel from “any and all claims, injuries, liabilities or damages” without reference to claims of negligence.
A finding of overbreadth did not end the inquiry, however. The question remained whether this rendered the exculpatory clause completely unenforceable or only unenforceable to the extent Justice asserted a claim of greater-than-ordinary negligence. Applying past precedent, the court held the latter. Finally, the court agreed with Marvel that Justice had not made a claim for greater-than-ordinary negligence.
In sum, the court of appeals affirmed the district court’s decision to dismiss Justice’s suit based on the pre-injury exculpatory clause signed by his mother.
The key takeaways from the Justice decision:
- A valid exculpatory clause signed by a parent on behalf of a minor child is binding after the child turns 18.
- The enforceability of exculpatory waivers is complex.
- Exculpatory clauses are enforceable only to the extent they purport to release claims of ordinary negligence and should be drafted accordingly.
- Exculpatory clauses may be effective at limiting liability, but are not a magic bullet to avoiding all litigation.