Brief Fact Summary.
Leo Richards was employed by Monkem Company (Company) as a truck driver, and his wife (Plaintiff) was required to sign a “Passenger Authorization” in order to ride along with her husband. The Plaintiff was injured in an accident while accompanying her husband, sustaining injuries, but was not permitted to recover under the terms of the Passenger Authorization.
Synopsis of Rule of Law.
Exculpatory contracts are not favored by the law because they tend to allow conduct below the acceptable standard of care applicable to the activity; however, they are not automatically void. Courts must look to see whether exculpatory language offends the common sense and common conscience of the community.
The Passenger Authorization served two purposes: 1] it was required in order for a passenger to ride in a company truck, and 2] it served as a passenger’s general release of all claims against the company (it was an exculpatory contract). The form was simply entitled “Passenger Authorization,” however, and Plaintiff had to sign it before she could ride with her husband.
When Plaintiff was injured in an accident and the Company disclaimed liability, the circuit court granted summary judgment to the Defendant. The Court of Appeals affirmed.
Was the exculpatory contract void?
Yes, the exculpatory contract was void as against public policy. Reversed and remanded.
· The dual purposes of the contract were not made clear in the title, which was simply “Passenger Authorization.” It was not reasonably clear to the signer of the form that it would release the Company from liability.
· The release was extremely broad and all-inclusive, raising questions about its one-sidedness.
The Plaintiff did not have an opportunity to discuss and negotiate the contract before signing it, which was significant in light of the breadth of the release.
An exculpatory agreement will be held to contravene public policy if it is so broad that it would absolve the defendant from any injury to the plaintiff for any reason.View Full Point of Law
The court looked at the combination of all three factors all together in reaching the conclusion that it would be contrary to public policy to enforce the exculpatory language.