Bagley v. Mt. Bachelor, Inc.

356 Ore. 543

 

RULE:

Oregon courts have recognized their authority to refuse to enforce unconscionable contracts since the nineteenth century. A court may refuse specific performance if a bargain is unconscionable. Unconscionability is assessed as of the time of contract formation, and the doctrine applies to contract terms rather than to contract performance. Unconscionability is a legal issue that must be assessed as of the time of contract formation. Unconscionability may be procedural or substantive. Procedural unconscionability refers to the conditions of contract formation and focuses on two factors: oppression and surprise. Oppression exists when there is inequality in bargaining power between the parties, resulting in no real opportunity to negotiate the terms of the contract and the absence of meaningful choice. Surprise involves whether terms were hidden or obscure from the vantage of the party seeking to avoid them. Generally speaking, factors such as ambiguous contract wording and fine print are the hallmarks of surprise. In contrast, the existence of gross inequality of bargaining power, a take-it-or-leave-it bargaining stance, and the fact that a contract involves a consumer transaction, rather than a commercial bargain, can be evidence of oppression.

FACTS:

Plaintiff suffered serious injuries while snowboarding at defendant ski area operator’s “terrain park” and brought suit, claiming that defendant was negligent in the design, construction, maintenance, and inspection of the jump in which the plaintiff was injured. Defendant moved for summary judgment and plaintiff filed a cross-motion for partial summary judgment on the ground that the release signed was unenforceable as a matter of law. The trial court granted defendant’s summary judgment motion and denied the plaintiff’s cross-motion. Plaintiff appealed, asserting that the trial court erred in concluding that the release did not violate public policy and that it was neither substantively nor procedurally unconscionable. The Court of Appeals affirmed.

ISSUE:

Was an anticipatory release of a ski area operator’s liability for its own negligence in a ski pass agreement enforceable in the face of an assertion that the release violates public policy and is unconscionable?

ANSWER:

No.

CONCLUSION:

A grant of summary judgment in favor of the operator in the snowboarder’s negligence action was improper because enforcement of the anticipatory release would have been unconscionable. The snowboarder had no meaningful alternative to the operator’s terms if he wanted to participate in snowboarding and he had no opportunity to negotiate for different terms or pay an additional fee for protection against negligence. Accepting as true the allegations in the complaint, he would not have been injured if defendant had exercised reasonable care in designing, constructing, maintaining, or inspecting the jump on which he was injured, and the operator, not its patrons, had the expertise and opportunity and duty to foresee and avoid unreasonable risks of its own creation on its business premises, the enforcement of the release would cause a harsh and inequitable result. Judgment reversed and remanded.

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