Richards v. Richards

Supreme Court of Wisconsin, 1994.

181 Wis.2d 1007, 513 N.W.2d 118.

Dawson, pp. 527-531

 

Facts: Jerilyn wanted to ride in Leo’s truck.  Leo’s employer made her sign a “passenger authorization”, which included exculpatory language.  Then they got into an accident in the truck where Jerilyn got injured.  Jerilyn tries to sue her husband and his employer.  The trial court found for the defendants by summary judgment, citing the exculpatory clause in the contract.  The intermediate appellate court affirmed, and Jerilyn appealed to the Supreme Court of Wisconsin.

 

Issue: Shall the exculpatory agreement be enforced against Jerilyn, barring her suit?

 

Rule: A court may find an exculpatory agreement void if on balance the interest in compensating injured people outweighs the freedom of contract.

 

Analysis: The majority says that three factors come together to make the exculpatory agreement void:

 

1.     The contract has two purposes, but they aren’t both clear at a glance.  The contract both serves as a “permission slip” in a sense and also as a release of the company from liability.  The court says that the two parts should have been split up into separate agreements to make it clear to the signer just what they were getting into.

2.     The release is very broad, which means that it is vague as well as too biased towards the company which drafted the contract.

3.     The contract is a standardized form that is “take it or leave it” without room to bargain.

 

Any of the factors alone would not be enough to void the agreement, but the court says that taken together they swing the balance in favor of the public policy that injured people should have the opportunity to be compensated.

 

Conclusion: The lower courts are reversed.

 

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