BREWER, J.
The issue on review in this case is whether an anticipatory release
We review the trial court's rulings on summary judgment to determine whether "there is no genuine issue as to any material fact" and whether "the moving party is entitled to prevail as a matter of law." ORCP 47 C. We view the historical facts set out in the summary judgment record, along with all reasonable inferences that may be drawn from them, in the light most favorable to the nonmoving party — plaintiff on defendant's motion for summary judgment, and defendant on plaintiffs cross-motion. Id.; Vaughn v. First Transit, Inc., 346 Or. 128, 132, 206 P.3d 181 (2009). The historical facts in the record largely relate to the enforceability of the release at issue. Defendant's summary judgment motion did not address the issues of negligence, causation, or damages. Therefore, insofar as those issues are relevant to the enforceability of the release, we accept as true the allegations in plaintiff's complaint. ORCP 47 C (adverse party on summary judgment has burden of producing evidence only "on any issue raised in the motion as to which adverse party would have burden of persuasion at trial").
On September 29, 2005, plaintiff purchased a season pass from defendant for use at defendant's ski area. Plaintiff was a skilled and experienced snowboarder, having purchased season passes from defendant for each of the preceding three years and having classified his skill level as of early 2006, before being injured, as an "advanced expert." Upon purchasing the season pass, plaintiff executed a written "release and indemnity agreement" that defendant required of all its patrons. That document provided, in pertinent part:
(Capitalization omitted.)
On November 18, 2005, plaintiff began using the pass, which stated, in part:
(Capitalization omitted.) Further, the following sign was posted at each of defendant's ski lift terminals:
(Capitalization in original.)
Beginning on November 18, 2005, plaintiff used his season pass to ride defendant's lifts at least 119 times over the course of 26 days that he spent snowboarding at the ski area. On February 16, 2006, while snowboarding over a human-made jump in defendant's "air chamber" terrain park, plaintiff sustained serious injuries resulting in his permanent paralysis. Approximately four months later, plaintiff provided defendant with notice of his injuries under ORS 30.980(1), which requires that "[a] ski area operator shall be notified of any injury to a skier * * * within 180 days after the injury[.]" Within two years after he was injured, plaintiff brought this action; his complaint alleged negligence on defendant's part in designing, constructing, maintaining, and inspecting the jump on which plaintiff was injured. Defendant answered, in part, by invoking the affirmative defense of release, pointing to the above-quoted documents.
In its summary judgment motion, defendant asserted that plaintiff "admittedly understood that he [had] entered into a release agreement and was snowboarding under its terms on the date of [the] accident." Defendant argued that the release conspicuously and unambiguously disclaimed its future liability for negligence, and that the release was neither unconscionable nor contrary to public policy under Oregon law, because "skiers and snowboarders voluntarily choose to ski and snowboard and ski resorts do not provide essential public services." Thus, defendant reasoned, there was no material issue of fact as to whether the release barred plaintiff's action, and defendant was entitled to judgment as a matter of law.
In his cross-motion for partial summary judgment, plaintiff asserted that the release was unenforceable because it was contrary to public policy and was "both substantively and procedurally unconscionable." The trial court rejected plaintiff's public policy and unconscionability arguments, reasoning that "[s]now riding is not such an essential service which requires someone such as [p]laintiff to be forced to sign a release in order to obtain the service." Accordingly, the trial court granted summary judgment in defendant's favor and denied plaintiffs cross-motion for partial summary judgment.
As noted, the Court of Appeals affirmed. The court initially observed that the line between the public policy and unconscionability doctrines on which plaintiff relied was not clearly delineated:
Bagley, 258 Or.App. at 403 n. 7, 310 P.3d 692. The court then proceeded separately to analyze plaintiff's arguments. It first concluded that the release did not violate public policy. In particular, the court understood plaintiff to rely on an uncodified Oregon public policy that gives primacy to the tort duties of landowners and business operators to provide safe premises for invitees. In rejecting plaintiff's argument, the Court of Appeals relied on several factors. First, the court observed that the release "clearly and unequivocally" expressed defendant's intent to disclaim liability for negligence. Id. at 405, 310 P.3d 692 ("[W]e are hard-pressed to envision a more unambiguous expression of `the expectations under the contract'[.]"). Second, the court noted that anticipatory releases that disclaim liability only for ordinary negligence do not necessarily offend public policy where they pertain exclusively to recreational activities and, most importantly, where the party seeking to relieve itself from liability does not provide an essential public service. Id. The court noted that a ski resort primarily offers recreational activities that, with possible exceptions that do not apply in
The court then rejected plaintiff's unconscionability argument for essentially the same reasons. First, the court concluded, the release was not procedurally unconscionable in that it did not surprise plaintiff (that is, it was conspicuous and unambiguous) and it was not impermissibly oppressive, because, even though offered on a "take it or leave it basis," plaintiff always could choose not to engage in the non-essential recreational activity that defendant offered. Id. at 407-08, 310 P.3d 692. The court also concluded that the release was not essentially unfair and, therefore, was not substantively unconscionable. Id. at 409, 310 P.3d 692. Although "favorable" to defendant, the release was not impermissibly so, the court stated, because a person does not need to ski or snowboard, but rather merely desires to do so. That is, the patron is free to walk away rather than accept unjust terms. Id. at 409-10, 310 P.3d 692. For those reasons, the court affirmed the trial court's summary judgment rulings and its dismissal of plaintiff's action.
The parties' dispute in this case involves a topic — the validity of exculpatory agreements — that this court has not comprehensively addressed in decades. Although the specific issue on review — the validity of an anticipatory release of a ski area operator's liability for negligence — is finite and particular, it has broader implications insofar as it lies at the intersection of two traditional common law domains — contract and tort — where, at least in part, the legislature has established statutory rights and duties that affect the reach of otherwise governing common law principles.
It is a truism that a contract validly made between competent parties is not to be set aside lightly. Bliss v. Southern Pacific Co. et al, 212 Or. 634, 646, 321 P.2d 324 (1958) ("When two or more persons competent for that purpose, upon a sufficient consideration, voluntarily agree to do or not to do a particular thing which may be lawfully done or omitted, they should be held to the consequences of their bargain."). The right to contract privately is part of the liberty of citizenship, and an important office of the courts is to enforce contractual rights and obligations. W.J. Seufert Land Co. v. Greenfield, 262 Or. 83, 90-91, 496 P.2d 197 (1972) (so stating). As this court has stated, however, "contract rights are [not] absolute; * * * [e]qually fundamental with the private right is that of the public to regulate it in the common interest." Christian v. La Forge, 194 Or. 450, 469, 242 P.2d 797 (1952) (internal quotation marks omitted).
That "common," or public, interest is embodied, in part, in the principles of tort law. As a leading treatise explains:
W. Page Keeton, Prosser and Keeton on the Law of Torts § 4, 20-25 (5th ed 1984). See also Dan B. Dobbs, The Law of Torts § 8, 12 (2000) (most commonly mentioned aims of tort law are compensation of injured persons and deterrence of undesirable behavior). A related function of the tort system is to distribute the risk of injury to or among responsible parties. Prosser and Keeton, § 4, 24-25.
Id. at 689, 193 P. 435 (internal citation omitted); see also Eldridge et al. v. Johnston, 195 Or. 379, 405, 245 P.2d 239 (1952) ("It is elementary that public policy requires that * * * contracts [between competent parties], when entered into freely and voluntarily, shall be held sacred and shall be enforced by the courts of justice, and it is only when some other overpowering rule of public policy * * * intervenes, rendering such agreement illegal, that it will not be enforced.").
In determining whether an agreement is illegal because it is contrary to public policy, "[t]he test is the evil tendency of the contract and not its actual injury to the public in a particular instance." Pyle v. Kernan, 148 Or. 666, 673-74, 36 P.2d 580 (1934). The fact that the effect of a contract provision may be harsh as applied to one of the contracting parties does not mean that the agreement is, for that reason alone, contrary to public policy, particularly where "the contract in question was freely entered into between parties in equal bargaining positions and did not involve a contract of adhesion, such as some retail installment contracts and insurance policies." Seufert, 262 Or. at 92, 496 P.2d 197.
As we discuss in more detail below, courts determine whether a contract is illegal by determining whether it violates public policy as expressed in relevant constitutional and statutory provisions and in case law, see, e.g., Delaney v. Taco Time Int'l, Inc., 297 Or. 10, 681 P.2d 114 (1984) (looking to those sources to determine whether discharge of at-will employee violated public policy), and by considering whether it is unconscionable. With respect to the doctrine of unconscionability, one commentator has explained:
Richard A. Lord, 8 Williston on Contracts § 18.10, 91 (4th ed 2010). As that passage suggests, the doctrine of unconscionability reflects concerns related specifically to the parties and their formation of the contract, but it also has a broader dimension that converges with an analysis of whether a contract or contract term is illegal because it violates public policy.
As discussed, the Court of Appeals concluded that the release at issue here did not violate public policy and was not unconscionable for essentially the same reasons: it was conspicuous and unambiguous, and it related to a recreational activity, not an essential public service. Likewise, neither party has suggested that different legal standards apply in determining whether the release at issue in this case violates public policy or is unconscionable. Thus, for the sake of convenience — if not doctrinal convergence — we address the parties' public policy arguments in the context of our analysis of whether, in the particular circumstances of this case, enforcement of the release would be unconscionable.
Oregon courts have recognized their authority to refuse to enforce unconscionable contracts since the nineteenth century. See Balfour, 14 Or. 47, 12 P. 89 (refusing to award attorney fees because amount specified in contract was unconscionable); see also Caples v. Steel, 7 Or. 491 (1879) (court may refuse specific performance if 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." Best v. U.S. National Bank, 303 Or. 557, 560, 739 P.2d 554 (1987) ("Unconscionability is a legal issue that must be assessed as of the time of contract formation."); Tolbert v. First National Bank, 312 Or. 485, 492 n. 4, 823 P.2d 965 (1991) (same).
Unconscionability may be procedural or substantive. Procedural unconscionability refers to the conditions of contract formation and focuses on two factors: oppression and surprise. See, e.g., John Edward Murray, Jr., Murray on Contracts § 96(b), 555-56 (4th ed 2001) (describing components of procedural unconscionability). 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. Vasquez-Lopez v. Beneficial Oregon, Inc., 210 Or.App. 553, 566-567, 152 P.3d 940, 948 (2007); Acorn v. Household Intern. Inc., 211 F.Supp.2d 1160, 1168 (N.D.Cal.2002). Surprise involves whether terms were hidden or obscure from the vantage of the party seeking to avoid them. Id. 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.
Substantive unconscionability, on the other hand, generally refers to the terms of
Identifying whether a contract is procedurally unconscionable requires consideration of evidence related to the specific circumstances surrounding the formation of the contract at issue. By contrast, the inquiry into substantive unconscionability can be more complicated. To discern whether, in the context of a particular transaction, substantive concerns relating to unfairness or oppression are sufficiently important to warrant interference with the parties' freedom to contract as they see fit, courts frequently look to legislation for relevant indicia of public policy. When relevant public policy is expressed in a statute, the issue is one of legislative intent. See Uhlmann, 97 Or. at 689-90, 193 P. 435 (so stating). In that situation, the court must examine the statutory text and context to determine whether the legislature intended to invalidate the contract term at issue.
Frequently, however, the argument that a contract term is sufficiently unfair
Restatement § 178 comment b.
This court has considered whether enforcement of an anticipatory release would violate an uncodified public policy in only a few cases. Although, in those cases, this court has not expressly analyzed the issue through the lens of unconscionability, it has followed an approach that is generally consistent with the application of that doctrine. That is, the court has not declared such releases to be per se invalid, but neither has it concluded that they are always enforceable. Instead, the court has followed a multi-factor approach:
K-Lines v. Roberts Motor Co., 273 Or. 242, 248, 541 P.2d 1378 (1975).
In K-Lines, this court upheld a limitation of liability contained in a commercial sales agreement. The court held that the fact
Id. at 252-53, 541 P.2d 1378. The court also noted that, in an earlier decision, it had stated:
Id. at 248, 541 P.2d 1378 (quoting Irish & Swartz Stores v. First Nat'l Bk., 220 Or. 362, 375, 349 P.2d 814 (1960), overruled on other
Soon after deciding K-Lines, this court, in Real Good Food, held that a bank — serving as a bailee for depositors — could not limit its liability for the negligence of its employees. Relying on the Restatement (Second) of Torts, the court held:
Id. at 1061, 557 P.2d 654 (quoting Restatement (Second) of Torts § 496B comment g (1965)).
Finally, this court has held that another factor for determining whether an anticipatory release may be unenforceable is the possibility of a harsh or inequitable result for the releasing party. Commerce & Industry Ins. v. Orth, 254 Or. 226, 231-32, 458 P.2d 926 (1969) (so stating); Estey v. MacKenzie Engineering Inc., 324 Or. 372, 376-77, 927 P.2d 86 (1996) (court's inquiry into intent of parties to immunize against negligence "focuse[s] not only on the language of the contract, but also on the possibility of a harsh or inequitable result that would fall on one party by immunizing the other party from the consequences of his or her own negligence").
We glean from those decisions that relevant procedural factors in the determination of whether enforcement of an anticipatory release would violate public policy or be unconscionable include whether the release was conspicuous and unambiguous; whether there was a substantial disparity in the parties' bargaining power; whether the contract was offered on a take-it-or-leave-it basis; and whether the contract involved a consumer transaction. Relevant substantive considerations include whether enforcement of the release would cause a harsh or inequitable result to befall the releasing party; whether the releasee serves an important public interest or function; and whether the release purported to disclaim liability for more serious misconduct than ordinary negligence. Nothing in our previous decisions suggests that any single factor takes precedence over the others or that the listed factors are exclusive. Rather, they indicate that a determination whether enforcement of an anticipatory release would violate public policy or be unconscionable must be based on the totality of the circumstances of a particular transaction. The analysis in that regard is guided, but not limited, by the factors that this court previously has identified; it is also informed by any other considerations that may be relevant, including societal expectations.
Other procedural factors, however, point in a different direction. This was not an agreement between equals. Only one party to the contract — defendant — was a commercial enterprise, and that party exercised its superior bargaining strength by requiring its patrons, including plaintiff, to sign an anticipatory release on a take-it-or-leave-it basis as a condition of using its facilities. As the Restatement (Second) of Torts, section 496B, explains, a release may not be enforced
Id. comment j (emphasis added).
Also, plaintiff had no opportunity in this case to negotiate for different terms or pay an additional fee for protection against defendant's negligence. What makes the substantial disparity in the parties' bargaining positions even more significant in this circumstance is the limited number of ski areas that provide downhill skiing and snowboarding opportunities in Oregon, and the generality of the use of similar releases among that limited commercial cohort.
Strand v. U.S. Bank Nat. Ass'n, 693 N.W.2d 918, 925 (N.D.2005).
We next consider the substantive factors that are relevant to our inquiry. The parties have identified the following relevant factors: whether enforcement of the release would cause a harsh or inequitable result; whether defendant's recreational business operation serves an important public interest or function; and whether the release purported to disclaim liability for more serious misconduct than ordinary negligence.
We begin with the question whether enforcement of the release would cause a harsh and inequitable result to befall the releasing party, in this case, plaintiff. As discussed, this court has recognized the importance of that consideration in other cases. See, e.g., Estey, 324 Or. at 376, 927 P.2d 86. As pertinent here, we conclude that the result would be harsh because, accepting as true the allegations in plaintiff's complaint, plaintiff 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 that harsh result also would be inequitable because defendant, not its patrons, has the expertise and opportunity to foresee and control hazards of its own creation on its premises, and to guard against the negligence of its employees. Moreover, defendant alone can effectively spread the cost of guarding and insuring against such risks among its many patrons.
Those public policy considerations are embodied in the common law of business premises liability. Business owners and operators have a heightened duty of care toward patrons — invitees
Furthermore, a business operator's obligation to make its premises reasonably safe for its invitees includes taking into account the use to which the premises are put. See, e.g., Ragnone v. Portland School Dist. No. 1J, 291 Or. 617, 621 n. 3, 633 P.2d 1287 (1981) (so stating); Mickel v. Haines Enterprises, Inc., 240 Or. 369, 371-72, 400 P.2d 518 (1965) (owner must "take reasonable precautions to protect the invitee from dangers which are foreseeable from the arrangement or use of the premises.").
The legislature has statutorily modified those duties to some extent in the Skier Responsibility Law, ORS 30.970 to 30.990. Under ORS 30.975, skiers assume certain risks:
CORS 30.970(1) describes "inherent risks of skiing":
ORS 30.985 prescribes the duties of skiers, which generally deal with behaving safely while skiing.
By providing that a skier assumes the "inherent risks of skiing," ORS 30.975 reduced ski area operators' heightened common law duty to discover and guard against certain natural and inherent risks of harm. However, the Skier Responsibility Law did not abrogate the common-law principle that skiers do not assume responsibility for unreasonable conditions created by a ski area operator insofar as those conditions are not inherent to the activity. See Nolan v. Mt. Bachelor, Inc., 317 Or. 328, 336, 856 P.2d 305 (1993) (Skier Responsibility Law provides that "[t]o the extent an injury is caused by an inherent risk of skiing, a skier will not recover against a ski area operator; to the extent an injury is a result of [ski area operator] negligence, comparative negligence applies"). It follows that the public policy underlying the common-law duty of a ski area operator to exercise reasonable care to avoid creating risks of harm to its business invitees remains applicable in this case.
In short, because (1) accepting as true the allegations in plaintiff's complaint, plaintiff 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 (2) defendant, not its patrons, had the expertise and opportunity — indeed, the common-law duty — to foresee and avoid unreasonable risks of its own creation on its business premises, we conclude that the enforcement of the release would cause a harsh and inequitable result, a factor that militates against its enforcement.
To continue our analysis, we next consider whether defendant's business operation serves an important public interest or function. The parties sharply disagree about the importance of that factor to our resolution of this case. According to defendant, that factor is paramount here, because, as a matter of law, anticipatory releases of negligence liability are unenforceable only when a defendant provides an "essential" public service.
Although this court has not previously addressed that precise issue in the context of a release involving a recreational activity, other courts have done so. As defendant observes, courts in several jurisdictions that lack statutory prohibitions of anticipatory releases of liability for negligence have upheld such releases (at least in part) on the ground that the activity at issue did not involve an "essential" public service.
For example, in Dalury v. S-K-I, Ltd., 164 Vt. 329, 670 A.2d 795 (1995), the Vermont Supreme Court rejected the argument that anticipatory releases of negligence liability necessarily are enforceable in the context of recreational activities because such activities are not essential. 670 A.2d at 799. In that case, the plaintiff sustained serious injuries when he collided with a metal pole that formed part of the control maze for a ski-lift line. He brought a negligence action against
On appeal, the court noted that the release was conspicuous and unambiguous, but it nevertheless concluded that the release violated public policy. Id. at 797. The court began its analysis with the Restatement (Second) of Torts § 496B comment b, which states that an anticipatory release should be upheld if (1) it is freely and fairly made, (2) between parties who are in equal bargaining positions, and (3) there is no societal interest with which it interferes. Dalury, 670 A.2d at 797. The parties' dispute focused on the last issue. The defendant urged the court to conclude that, because skiing — like other recreational activities — is not a necessity of life, the sale of a lift ticket is a purely private transaction that implicates no public interest. The court concluded that "no single formula will reach the relevant public policy issues in every factual context." Id. at 798. Rather, the court stated that it would consider "the totality of the circumstances of any given case against the backdrop of current societal expectations." Id.
The court found a significant public policy consideration in the case in the law of premises liability; in particular, the court stated, business owners — including ski area operators — owe a duty of care to make their premises safe for patrons where their operations create a foreseeable risk of harm. Id. at 799. The court observed that
Id.
Turning to the defendant's argument that the release was enforceable because ski resorts do not provide an essential public service, the court stated that, "[w]hile interference with an essential public service surely affects the public interest, those services do not represent the universe of activities that implicate public concerns." Id. The court held that, "when a facility becomes a place of public accommodation, it `render[s] a service which has become of public interest in the manner of the innkeepers and common carriers of old.'" Id. at 799-800 (quoting Lombard v. Louisiana, 373 U.S. 267, 279, 83 S.Ct. 1122, 10 L.Ed.2d 338 (1963)) (internal quotation marks omitted).
Finally, the court's analysis was informed by a statute that placed the "inherent risks" of any sport on the participant, insofar as the risks were obvious and necessary.
We, too, think that the fact that defendant does not provide an essential public service does not compel the conclusion that the release in this case must be enforced. As the court stated in Dalury, "[w]hile interference with an essential public service surely affects the public interest, those services do not represent the universe of activities that implicate public concerns." 670 A.2d at 799. It is true that ski areas do not provide the kind of public service typically associated with government entities or heavily regulated private enterprises such as railroads, hospitals, or banks. See Real Good Food, 276 Or. at 1061, 557 P.2d 654 ("Banks, like common carriers and utility companies, perform an important public service, and, for that very reason, are subject to state and federal regulation."). However, like other places of public accommodation such as inns or public warehouses, defendant's business premises — including its terrain park — are open to the general public virtually without restriction, and large numbers of skiers and snowboarders regularly avail themselves of its facilities. To be sure, defendants' business facilities are privately owned, but that characteristic does not overcome a number of legitimate public interests concerning their operation.
The major public interests at stake are those underlying the law of business premises liability. The policy rationale is to place responsibility for negligently created conditions of business premises on those who own or control them, with the ultimate goal of mitigating the risk of injury-producing accidents. Hagler, 354 Or. at 140-41, 309 P.3d 1073; Garrison, 334 Or. at 272, 48 P.3d 807. In that setting, where a business operator extends a general invitation to enter and engage in activities on its premises that is accepted by large numbers of the public, and those invitees are subject to risks of harm from conditions of the operator's creation, their safety is a matter of broad societal concern. See Dalury, 670 A.2d at 799 ("[W]hen a substantial number of such sales take place as a result of the [operator's] general invitation to the public to utilize the facilities and services in question, a legitimate public interest arises."). The public interest, therefore, is affected by the performance of the operator's private duties toward them. See, e.g., Strawbridge v. Sugar Mountain Resort, Inc., 320 F.Supp.2d 425, 433-34 (W.D.N.C.2004) (holding, under North Carolina law, that "the ski industry is sufficiently regulated and tied to the public interest" to preclude enforcement of anticipatory release, based on the principle that "a party cannot protect himself by contracting] against liability for negligence * * * where * * * public interest is involved, or where public interest requires the performance of a private duty"). Accordingly, we reject defendant's argument that the fact that skiing and snowboarding are "non-essential" activities
Finally, we consider the nature of the conduct to which the release would apply in this case. Defendant makes a fair point that, although the release purports to immunize it from liability for any misconduct short of intentional conduct, plaintiff's claim is based on ordinary negligence. Defendant notes that this court has held that an anticipatory release violates public policy where it purports to immunize the releasee from liability for gross negligence, reckless, or intentional conduct, but a release that disclaims liability only for ordinary negligence more often is enforced. K-Lines, 273 Or. at 249, 541 P.2d 1378. That statement is correct as a general comment on the validity of anticipatory releases, but, of course, whether any particular release will be enforced depends on the various factors that we discuss in this opinion. In the circumstances of this transaction, the fact that plaintiffs claim is based on negligence rather than on more egregious conduct carries less weight than the other substantive factors that we have considered or than it would, for example, in a commercial transaction between parties of relatively equal bargaining power.
To summarize, our analysis leads to the conclusion that permitting defendant to exculpate itself from its own negligence would be unconscionable. As discussed, important procedural factors supporting that conclusion include the substantial disparity in the parties' bargaining power in the particular circumstances of this consumer transaction, and the fact that the release was offered to plaintiff and defendant's other customers on a take-it-or-leave-it basis.
There also are indications that the release is substantively unfair and oppressive. First, a harsh and inequitable result would follow if defendant were immunized from negligence liability, in light of (1) defendant's superior ability to guard against the risk of harm to its patrons arising from its own negligence in designing, creating, and maintaining its runs, slopes, jumps, and other facilities; and (2) defendant's superior ability to absorb and spread the costs associated with insuring against those risks. Second, because defendant's business premises are open to the general public virtually without restriction, large numbers of skiers and snowboarders regularly avail themselves of its facilities, and those patrons are subject to risks of harm from conditions on the premises of defendant's creation, the safety of those patrons is a matter of broad societal concern. The public interest, therefore, is affected by the performance of defendant's private duties toward them under business premises liability law.
In the ultimate step of our unconscionability analysis, we consider whether those procedural and substantive considerations outweigh defendant's interest in enforcing the release at issue here. Restatement (Second) of Contracts § 178 comment b ("[A] decision as to enforceability is reached only after a careful balancing, in the light of all the circumstances, of the interest in the enforcement of the particular promise against the policy against the enforcement of such terms."). Defendant argues that, in light of the inherent risks of skiing, it is neither unfair nor oppressive for a ski area operator to insist on a release from liability for its own negligence. As defendant explains,
Further, defendant contends, denying enforcement of such a release
Defendant's arguments have some force. After all, skiing and snow boarding are activities whose allure and risks derive from a unique blend of factors that include natural features, artificial constructs, and human engagement. It may be difficult in such circumstances to untangle the causal forces that lead to an injury-producing accident. Moreover, defendant is correct that several relevant factors weigh in favor of enforcing the release. As discussed, the release was conspicuous and unambiguous, defendant's alleged misconduct in this case was negligence, not more egregious conduct, and snowboarding is not a necessity of life.
That said, the release is very broad; it applies on its face to a multitude of conditions and risks, many of which (such as riding on a chairlift) leave defendant's patrons vulnerable to risks of harm of defendant's creation. Accepting as true the allegations in plaintiff's complaint, defendant designed, created, and maintained artificial constructs, including the jump on which plaintiff was injured.
A final point deserves mention. It is axiomatic that public policy favors the deterrence of negligent conduct. 2 Farnsworth on Contracts § 5.2, 9-12 ("[i]n precedents accumulated over centuries," courts have relied on policy "against the commission or inducement of torts and similar wrongs"). Although that policy of deterrence has implications in any case involving the enforceability of an anticipatory release of negligence liability, here, that policy bolsters the other considerations that weigh against enforcement of the release. As the parties readily agree, the activities at issue in this case involve considerable risks to life and limb. Skiers and snowboarders have important legal inducements to exercise reasonable care for their own safety by virtue of their statutory assumption of the inherent risks of skiing. By contrast, without potential exposure to liability for their own negligence, ski area operators would lack a commensurate legal incentive to avoid creating unreasonable risks of harm to their business invitees. See Alabama Great Southern Railroad Co. v. Sumter Plywood Corp., 359 So.2d 1140, 1145 (Ala.1978) (human experience shows that exculpatory agreements induce a lack of care). Where, as here, members of the public are invited to participate without restriction in risky activities on defendant's business premises (and many do), and where the risks of harm posed by operator negligence are appreciable, such an imbalance in legal incentives is not conducive to the public interest.
Because the factors favoring enforcement of the release are outweighed by the countervailing considerations that we have identified, we conclude that enforcement of the release at issue in this case would be unconscionable.
The decision of the Court of Appeals is reversed. The judgment of the trial court is reversed and the case is remanded to that court for further proceedings.
Phoenix Ins. Co. v. Rosen, 242 Ill.2d 48, 61, 350 Ill.Dec. 847, 949 N.E.2d 639 (2011). As that passage suggests, the two doctrines are aimed at similar concerns: unfairness or oppression in contract formation or terms that are sufficiently serious as to justify the conclusion that the contract contravenes the interests of justice.
Some states use statutes to make anticipatory releases from liability for negligence void as against public policy as to businesses providing recreational activities to the public. N.Y. Gen. Oblig. Law § 5-326 (every contract between recreational business owner and user of facility, pursuant to which owner receives payment for use of facilities, that exempts owner from liability for damages resulting from owner's negligence "shall be deemed void as against public policy and wholly unenforceable"); Haw. Rev. Stat. § 663-1.54(a) ("Any person who owns or operates a business providing recreational activities to the public * * * shall be liable for damages resulting from negligent acts or omissions of the person which cause injury.").
Other states have enacted more narrowly crafted statutes that deal with specific recreational activities, including skiing. For example, an Alaska statute specifically prohibits ski area operators from requiring skiers to enter into agreements releasing them from liability in exchange for the use of the facilities. Alaska Stat. Ann. § 05.45.120. In North Carolina, a statute imposes a duty on ski area operators "[n]ot to engage willfully or negligently in any type of conduct that contributes to or causes injury to another person or his properties." N.C. Gen. Stat. § 99C-2(c)(7); N.C. Gen. Statute § 99C-3 (violation of duties of ski area operator that causes injury or damage shall constitute negligence); see also Strawbridge v. Sugar Mountain Resort, Inc., 320 F.Supp.2d 425, 433 (W.D.N.C.2004) (in light of statutory duty imposed on ski area operators not to negligently engage in conduct that causes injury, exculpatory clause on back of lift ticket was unenforceable).
Still other states have statutes that pertain specifically to skiing and, although not addressing releases, prescribe ski area operator duties and provide that operators will be liable for a violation of those duties. Colo. Rev. Stat. § 33-44-104(1) (violation of duties of ski area operator constitutes negligence to extent such violation causes injury to any person or damage to property); see also Anderson v. Vail Corp., 251 P.3d 1125, 1129-30 (Colo.App.2010) (if ski area operator violated statutory duties, exculpatory agreement would not release operator from liability); Idaho Code § 6-1107 ("Any ski area operator shall be liable for loss or damages caused by its failure to follow the duties set forth in [other sections of the Idaho Code pertaining to duties of ski area operators], where the violation of duty is causally related to the loss or damage suffered."); N.M. Stat. Ann. § 24-15-11 (to same effect); N.D. Cent. Code § 53-09-07 (same); W. Va. Code § 20-3A-6 (same); Utah Code Ann. § 78B-4-401(public policy of Utah Inherent Risks of Skiing Act is to make ski area operators better able to insure themselves against the risk of loss occasioned by their negligence); see also Rothstein v. Snowbird Corp., 175 P.3d 560, 564 (Utah 2007) (by extracting a pre-injury release from plaintiff for liability due to ski resort's negligent acts, resort breached public policy underlying Utah Inherent Risks of Skiing Act).
According to the comments to that section, an exculpatory agreement should be upheld if it is freely and fairly made, if it is between parties who are in an equal bargaining position, and if there is no societal interest with which it interferes. Restatement (Second) of Torts § 496B comment b. Comments e-j set out a non-exclusive list of situations in which releases may interfere with societal interests, insofar as they are contrary to public policy. Among other things, in addition to situations like those described in the passage quoted above, the Restatement refuses to give effect to express liability releases where there is a substantial disparity in bargaining power. Restatement (Second) of Torts § 496B comment j.
Buchler v. Oregon Corrections Div., 316 Or. 499, 518-19, 853 P.2d 798 (1993) (Peterson, J., concurring).
