Sunday, May 06, 2018

consumer - contracts - exculpatory clauses - public policy

Vinson v. Fitness and Sports Clubs, Inc. – Pa. Superior – May 4, 2018

The Pennsylvania Supreme Court has held that exculpatory provisions in contracts are valid where three conditions are met: “First, the clause must not contravene public policy. Secondly, the contract must be between persons relating entirely to their own private affairs and thirdly, each party must be a free bargaining agent to the agreement so that the contract is not one of adhesion.” Chepkevich v. Hidden Valley Resort, L.P., 2 A.3d 1174, 1189 (Pa. 2010) (holding exculpatory provision contained in contract regarding season pass at ski resort was valid and did not contravene public policy).

When embarking on a public policy analysis, we recognize that exculpatory provisions “violate public policy only when they involve a matter of interest to the public or the state. Such matters of interest to the public or the state include the employer-employee relationship, public service, public utilities, common carriers, and hospitals.” Seaton v. E. Windsor Speedway, Inc., 582 A.2d 1380, 1382 (Pa.Super. 1990).

Our Supreme Court has set a high bar that a party must clear before a court may invalidate a contract on public policy grounds: It is only when a given policy is so obviously for or against the public health, safety, morals or welfare that there is a virtual unanimity of opinion in regard to it, that a court may constitute itself the voice of the community in so declaring [that the contract is against public policy]. Williams v. GEICO Gov’t Employees Ins. Co., 32 A.3d 1195, 1200 (Pa. 2011) (citation omitted). “[P]ublic policy is to be ascertained by reference to the laws and legal precedents and not from general considerations of supposed public interest.” Id.