Vol. 78, No. 8, August
Enforceable Exculpatory Agreements: Do They Still
The Wisconsin Supreme Court
in Atkins v. Swimwest invalidated yet another
waiver-of-liability agreement. Atkins unfortunately does not
clarify this area of the law, and while it may still be possible to
create enforceable exculpatory agreements, there remain numerous traps
for nonvigilant drafters.
Law in Wisconsin Offers Guidance on Drafting Enforceable
by Alexander T. Pendleton
ight years ago I wrote an article for Wisconsin
Lawyer entitled "Enforceable Exculpatory Agreements" that included
detailed suggestions about how to draft and otherwise create such
agreements.3 Earlier this year, the
Wisconsin Supreme Court in Atkins v. Swimwest Family Fitness
Center again considered the enforceability of exculpatory
agreements. With its decision in Atkins, the court has now
considered exculpatory agreements in a total of six cases in 25 years
and has, in every one of those cases, found the agreement at
Given the opinions of Justices Wilcox and Roggensack quoted below,
and the abysmal track record that exculpatory agreements have had before
the Wisconsin Supreme Court, it is prudent for lawyers to consider what
the majority actually says in Atkins. Is there such a thing as
an enforceable exculpatory agreement in Wisconsin anymore? And if so,
how does an attorney draft one that will be enforced by the courts?
"[T]he majority opinion will render it virtually
impossible to enforce any exculpatory agreement in Wisconsin."
Justice Wilcox, dissenting in
Atkins v. Swimwest Family Fitness Center1
"[T]he court has effectively removed the ability of
most businesses that operate paid recreational facilities to limit any
type of liability by contract."
Justice Roggensack, concurring in
Atkins v. Swimwest Family Fitness Center2
What Happened in Atkins
The Atkins case arose out of an accident in which Dr. Charis
Wilson drowned while swimming in a lap pool at a Madison fitness center.
Wilson went to the center to do physical therapy. As a condition of
being allowed to use the fitness center, she had to first complete a
guest registration and waiver release statement form. The form was
preprinted on a 5.5-inch by 5.5-inch card. The entire card was printed
in capital letters all of the same size, font, and color. The actual
"waiver language" on the card was limited to that shown in Figure 1. A Swimwest employee testified that Wilson "was
slow to fill out the card and ... it took her a long time to
eventually sign the card."5 There was only
one signature line on the card. Wilson knew how to swim, but soon after
she started swimming laps in the 4-foot-deep lap pool, an employee of
the center spotted her lying motionless near the bottom of the pool.
Although the lifeguard on duty attempted a rescue and resuscitation,
Wilson died the next day. The medical examiner indicated the cause of
death as drowning (although it was classified as a "dry drowning" - no
water was found in the lungs - which indicated that for some reason
Wilson had stopped breathing while in the pool).6
Representation of Swimwest's Waiver Statement
WAIVER RELEASE STATEMENT
I AGREE TO ASSUME ALL LIABILITY FOR MYSELF WITHOUT REGARD TO FAULT,
WHILE AT SWIMWEST FAMILY FITNESS CENTER. I FURTHER AGREE TO HOLD
HARMLESS SWIMWEST FITNESS CENTER, OR ANY OF ITS EMPLOYEES FOR ANY
CONDITIONS OR INJURY THAT MAY RESULT TO MYSELF WHILE AT THE SWIMWEST
FITNESS CENTER. I HAVE READ THE FOREGOING AND UNDERSTAND ITS
After Wilson's death, her minor son's guardian commenced a lawsuit on
the son's behalf against the fitness center, alleging that Swimwest was
negligent in operating the facility (particularly in managing and
observing the pool area), that procedures to prevent drowning were not
followed, and that the staff's negligence caused Wilson's death.7
The circuit court dismissed the lawsuit on the ground that Wilson had
read and signed the waiver of liability form when she arrived at the
fitness center. The court of appeals certified the issue of whether the
agreement in question was enforceable to the Wisconsin Supreme Court on
the ground that:
"[t]he Wisconsin courts have yet to formulate a clear, uniform test
for the enforceability of broadly worded exculpatory clauses. We believe
that this is an issue that will frequently recur, and that the supreme
court should take this opportunity to further clarify the applicable
The Wisconsin Supreme Court accepted the certification.
Pendleton, Minnesota 1987, is general counsel of Electroniclaim in
Thiensville. As a former trial lawyer, he has handled recreational
injury and exculpatory agreement cases, among others. The author thanks
Blaine R. Renfert and other former colleagues at Foley & Lardner LLP
for their suggestions regarding this article.
The Majority's Decision
The Wisconsin Supreme Court reversed the circuit court in a decision
authored by Justice Crooks (and joined by four other justices). The
majority decision began with the reminders that "Wisconsin case law does
not favor [exculpatory] agreements," and "[w]hile this court has not
held that an exculpatory clause is invalid per se, we have held that
such a provision must be construed strictly against the party seeking to
rely on it."9
The majority then discussed its two most recent exculpatory agreement
cases, Yauger v. Skiing Enterprises Inc. (a 1996 case involving
a girl who was killed when she skied into a ski-lift support tower) and
Richards v. Richards (a 1994 case involving a woman who was
injured while riding with her husband, a truck driver, on a work
trip).10 In Richards the court
articulated numerous factors it would consider when making a "public
policy" determination as to whether a particular exculpatory agreement
was enforceable, including whether there existed an "opportunity to
bargain."11 In Yauger the court
appeared to articulate a two-prong test to determine whether such
agreements are enforceable: 1) does the waiver "clearly, unambiguously
and unmistakably inform the signer what is being waived"?; and 2) does
the form, looked at in its entirety, "alert the signer to the nature and
significance of what is being signed"?12
The majority acknowledged that those two cases "place different weight
on the public policy factors used to invalidate exculpatory
agreements."13 The majority sidestepped
resolving the conflicting approaches in those two cases because it
believed that under either approach the agreement Wilson signed would be
The majority held that the agreement in Atkins was invalid
on public policy grounds for three reasons: 1) the agreement was "overly
broad and all inclusive"; 2) the form "served two purposes" (guest
registration and waiver of liability) and therefore failed to make clear
whether Wilson was fully notified of the significance of the document;
and 3) the facts did not indicate that Wilson had "any opportunity to
As to being "overly broad and all inclusive," the form indicated that
Wilson was assuming all liability for injury no matter what the cause.
Such language clearly violated public policy as set forth in Wisconsin
case law because it was broad enough to cover liability for reckless or
intentional acts, for which liability can never be waived.16 The majority also indicated that the breadth of
the waiver made it difficult to ascertain exactly what was within
Wilson's or the center's contemplation when Wilson signed the
form.17 Wilson, the majority said, "likely
would not have contemplated drowning in a four-foot deep pool with a
lifeguard on duty, when she signed the guest registration and waiver
As to the form's failing to provide adequate notice of the waiver's
nature and significance, Swimwest's form was defective in two ways: 1)
it served two purposes (registration and waiver), rather than just one;
and 2) there was nothing conspicuous about the paragraph containing the
"Waiver Release Statement."19 The court
noted, "Identifying and distinguishing clearly between those two
contractual arrangements [registration and waiver] could have provided
important protection against a signatory's inadvertent agreement to the
release."20 The entire form also was
printed on one card, using the same font style and size and ink color,
and provided only one signature line.21
Finally, the majority indicated the agreement would not be enforced
because there was no opportunity for Wilson to bargain over the form's
exculpatory language.22 Even though Wilson
was told the form included a waiver, took some time to read the form,
and had the opportunity to ask questions, the court held that these
facts were not sufficient to demonstrate a bargaining opportunity,
saying "[t]he form itself must provide an opportunity to
bargain."23 To the majority, it was
significant that Wilson would not have been allowed to use the facility
unless she signed the form. "She was forced to either sign the
form or not swim at Swimwest"24 (emphasis
Justice Roggensack's Concurrence
Justice Roggensack agreed with the majority that the trial court
erred when it granted Swimwest summary judgment, but for an entirely
different reason. Justice Roggensack believed summary judgment was not
warranted because an issue of fact existed as to whether Wilson
"contemplated the possibility of her own death when she signed the
waiver of liability."25 Justice Roggensack
would have remanded the case, so that the cause of Wilson's death could
be established (that is, why she stopped breathing, "as there may have
been medical circumstances that contributed to Wilson's death that had
nothing to do with her being submerged in a pool") and to allow the jury
to decide the issue of whether when Wilson signed the waiver she
contemplated that cause of death.26
Unlike the majority, Justice Roggensack would have relied solely on
the two-prong test the court articulated in Yauger.27 Justice Roggensack criticized the majority's
resurrection of the "bargaining" element first articulated in
Richards as a test for enforceability:
"[The majority] implies that the lack of an opportunity to bargain
could be sufficient to invalidate a release when it asserts, `The form
itself must provide an opportunity to bargain.' This is an unnecessary
broadening of the law that heretofore has set the framework for the
analysis of an exculpatory contract on public policy grounds."28
Justice Roggensack noted that while the lack of an opportunity to
bargain can be considered in evaluating the totality of the
circumstances surrounding the execution of a waiver, that element can
never be the sole ground on which a waiver is invalidated.29 "It would be unrealistic to require an employee
be authorized to bargain about the terms of a release of liability, and
it would be unrealistic that an owner always be present at the
facility."30 Requiring bargaining "will
result in an increase in lawsuits and in fewer swimming and other paid
recreational facilities for Wisconsin citizens to enjoy, a result that
does not further the public good."31
Justice Wilcox's Dissent
Justice Wilcox in his dissent strongly criticized the majority's
decision. Justice Wilcox believed the majority misapplied the factors
set forth in Yauger and Richards and "fail[ed] to
articulate a clear test as to what type of exculpatory agreements are
enforceable in this state." 32 He
"The majority applies the above three factors in such a fashion so as
to leave little possibility that any exculpatory agreement could be
enforceable in this state."33
Justice Wilcox chastised the majority for "revert[ing] back to the
test used in Richards while ignoring the lessons of
To Justice Wilcox, it was obvious that a reasonable person would
understand that a waiver at an aquatic facility would cover the risk of
drowning, and he believed it unnecessary for a waiver to list "each and
every conceivable form of negligence that may result in injury to a
The form did not serve two purposes, said Justice Wilcox, and it
adequately notified Wilson of the waiver's nature and
significance.36 He repeated the argument
that he originally made in his 1994 Richards dissent: "[i]t is
entirely impractical to require `bargaining' in this context."37
Justice Wilcox bemoaned the fact that the majority did not resolve
the disagreement between Yauger and Richards: "The
majority fails to resolve this dispute and leaves open the possibility
that even an exculpatory clause that is expertly drafted, conspicuous,
and appears on a separate document may be invalidated merely because the
signer had no `opportunity to bargain.'"38
Drafting Exculpatory Agreements
In light of Atkins, can an exculpatory agreement be crafted
to be enforceable? The majority of justices have indicated that they
will not hold all exculpatory agreements invalid, so it should be
possible to create an enforceable exculpatory agreement. In addition,
the court of appeals has on several occasions enforced reasonably
well-drafted exculpatory agreements.39
Thus, it is not impossible to draft an enforceable exculpatory
agreement, but to be enforceable an agreement must be drafted very
Much of what Atkins tells us is not new; therefore all of
the drafting suggestions set forth in the earlier Wisconsin
Lawyer article on this topic remain valid40 and should be read in tandem with the drafting
suggestions presented here.
Two factors that bear further discussion do stand out in
Atkins: 1) the form must not serve two purposes, and 2) the
form must indicate that the signer had the "opportunity to bargain."
To ensure that a form intended to be a waiver of liability does not
serve two purposes, a lawyer must focus on two issues. First, the lawyer
must focus on the language used in the waiver of liability agreement.
Does that language only relate to the risks associated with the activity
and the waiver of liability associated with such risks? Based on
Atkins, drafters should remove clauses unrelated to liability
that are commonly seen in waiver of liability agreements (for instance,
indemnification clauses and provisions granting a facility or event
organizer the right to use a participant's image without compensation).
Instead, put such clauses in separate agreements.
Second, the attorney must focus on what the client does with the
carefully drafted waiver language to ensure that the language is kept
entirely separate from registration/enrollment agreements. Ideally, the
waiver agreement should be on a separate page. If the waiver must appear
on a page with other text, the lawyer should ensure that a different
font or ink color is used to make the waiver conspicuous. When the user
signs the waiver agreement, there should be no question that the user
clearly knows that he or she is signing a waiver of liability. There
should be a signature line for the waiver and a separate signature line
or lines for other agreements or registrations. Finally, lawyers should
advise their clients never to camouflage waivers of liability. The
enforceability of the most carefully drafted exculpatory clause can be
severely undermined if the client prints the waiver on stationery or an
event brochure featuring graphics that in any way convey the impression
that what is being signed is not an important legal document. (For an
example of what not to do, see the snowflake and skier graphics used on
the release form in Yauger).41
The second Atkins factor that bears further discussion is
the "opportunity to bargain." Until the supreme court resolves the issue
of whether just one missing factor is sufficient to invalidate an
exculpatory agreement, drafters and businesses ignore the issue of
bargaining at their peril. In addition, note that the Atkins
majority opinion makes it clear that the form itself must demonstrate
that there is a "bargaining opportunity."42
There are several ways that a form could demonstrate that the signer
at least considered the issue of bargaining. Because there are no
Wisconsin cases that have held an exculpatory agreement form adequately
addresses the bargaining issue, lawyers are left to speculate as to how
to effectively draft one. No other jurisdiction in the nation has
articulated a similar bargaining opportunity factor,43 and so looking to cases from other jurisdictions
also provides no guidance. While there is no guidance from the courts,
drafters should consider the following suggestions. At a minimum, an
exculpatory agreement should state something like "I hereby waive the
right I have to bargain for different waiver of liability terms." That
may not be sufficient, but it is at least some evidence that the signer
considered the issue. A drafter might also include:
"I have considered that if this waiver of liability was not as broad
as it is, the cost for my use of the facility [or participation in the
event] would be considerably higher, and as I do not wish to pay a
considerably higher cost, I waive the right to bargain for different
waiver of liability terms."
If one wants to go further, a drafter
could include language something like that shown in Figure
It is unclear, however, if the language in Figure 2 actually
constitutes "bargaining" as that term is used by the Atkins
majority, because the participant is only given an option regarding
price, and the form itself does not provide a bargaining
From a drafter's perspective, it seems unworkable for "the form
itself [to] provide a bargaining opportunity" - unless the
Atkins court used the term "bargaining" differently than in its
usual sense. What does it actually mean for a form itself to provide a
bargaining opportunity? Can a form bargain? Must an event waiver form
have text indicating something like: "I offer to sign the below Release
of Liability and pay a registration price of $_____" and then an
additional section on the form where the parties offer and counter offer
regarding the proposed price? Such a requirement seems highly
unrealistic for the circumstances in which most public recreational
activities are conducted. Perhaps the supreme court in a future case
will provide clarification. The above text examples are only
suggestions, of course, and it may be that, once the supreme court
clarifies whether a bargaining opportunity is an essential element of an
enforceable exculpatory agreement, an otherwise well-drafted form will
not be invalidated merely because it does not provide a bargaining
The Wisconsin Supreme Court has now considered exculpatory agreements
in six cases in 25 years, and each time has found the agreement as
drafted to be unenforceable. It is as if the court keeps asking "can you
hear me now?" and lawyers and businesses that draft such agreements keep
ignoring what the court has said. (Of course, as noted by the court of
appeals and Justices Wilcox and Roggensack, it would be helpful if the
supreme court would speak clearly on this topic, that is, to "formulate
a clear, uniform test"45 in this area).
Until the court announces such a test, lawyers who draft exculpatory
agreements must: 1) carefully draft such an agreement applying what the
court has said so far, and 2) give thorough consideration to the
circumstances surrounding the signing of the agreement. Atkins
indicates that if this is not done, it is highly likely the courts will
not enforce the waiver.
1Atkins v. Swimwest Family
Fitness Ctr., 2005 WI 4, ¶ 44, 277 Wis. 2d 303, 691 N.W.2d
2Id. ¶ 38.
3Alexander T. Pendleton, Enforceable
Exculpatory Agreements, 70 Wis. Law. 10 (Nov. 1997).
4The five Wisconsin Supreme Court
exculpatory cases prior to Atkins are: Merten v.
Nathan, 108 Wis. 2d 205, 321 N.W.2d 173 (1982); Arnold v.
Shawano County Agric. Soc'y, 111 Wis. 2d 203, 330 N.W.2d 773
(1983), overruled on other grounds by Green Spring Farms v.
Kersten, 136 Wis. 2d 304, 401 N.W.2d 816 (1987); Dobratz v.
Thomson, 161 Wis. 2d 502, 468 N.W.2d 654 (1991); Richards v.
Richards, 181 Wis. 2d 1007, 513 N.W.2d 118 (1994); and Yauger
v. Skiing Enter. Inc., 206 Wis. 2d 76, 557 N.W.2d 60 (1996).
5These facts are from
Atkins, 2005 WI 4, ¶¶ 3-5, 41, 277 Wis. 2d 303, and
the Certification by the Wisconsin Court of Appeals at p. 2, Atkins
v. Swimwest Family Fitness Ctr., No. 03-2487 (Wis. Ct. App. April
20, 2004) (hereinafter "Certification").
6Atkins, 2005 WI 4, ¶
6 n.2, 277 Wis. 2d 303.
7Id. ¶ 8.
8Certification, at p. 5.
9Atkins, 2005 WI 4, ¶
12, 277 Wis. 2d 303.
11Richards, 181 Wis. 2d
12Yauger, 206 Wis. 2d at
13Atkins, 2005 WI 4,
¶ 18 n.7, 277 Wis. 2d 303.
15Id. ¶ 2.
16Id. ¶ 14; see
also Restatement (Second) of Contracts § 195(1) (1981).
17Atkins, 2005 WI 4,
¶ 21, 277 Wis. 2d 303.
23Id. ¶ 25.
24Id. ¶ 26 &
n.9 (emphasis added).
25Id. ¶ 31.
26Id. ¶ 41.
27Id. ¶ 33.
28Id. ¶ 36.
29Id. ¶ 36.
30Id. ¶ 37.
31Id. ¶ 38.
32Id. ¶ 44.
33Id. It is interesting
to note that the Wisconsin Supreme Court in November 2004 ruled that the
economic loss doctrine does not bar tort claims relating to
service contracts. Insurance Co. of N. Am. v. Cease Elec. Inc.,
2004 WI 139, 276 Wis. 2d 361, 688 N.W.2d 462. That is, a provider of
services (as opposed to products) is now completely barred by Wisconsin
law from limiting through contract the service provider's exposure to
the fairly open-ended and unpredictable liability and damages that can
exist under Wisconsin tort law. If one characterizes the owner of a
fitness center as a provider of services, one could argue under
Cease that, as a matter of law, the owner is barred from
limiting liability through contract. The same characterization might be
made of many other providers of recreational opportunities. To date, the
reported Wisconsin decisions have kept exculpatory agreements and the
economic loss doctrine in separate categories, but that could change in
34Atkins, 2005 WI 4,
¶ 44, 277 Wis. 2d 303.
35Id. ¶ 52.
36Id. ¶ 54.
37Id. ¶ 63.
38Id. ¶ 60.
39See Trainor v. Aztalan
Cycle Club Inc., 147 Wis. 2d 107, 432 N.W.2d 626 (Ct. App. 1988)
(motocross motorcycle race waiver upheld) (review denied); Werdehoff
v. General Star Indem. Co., 229 Wis. 2d 489, 600 N.W.2d 214 (Ct.
App. 1999) (motorcycle race waiver upheld); see also Rose v.
National Tractor Pullers Ass'n, 33 F. Supp. 2d 757 (W.D. Wis. 1988)
(tractor-pull contest waiver upheld). But see also the first exculpatory
agreement decision released by the court of appeals since the supreme
court's Atkins decision: Mettler v. Nellis, 2005 WI
App 73, __ Wis. 2d __, 695 N.W.2d 861 (holding exculpatory agreements
used by horse riding stable void on public policy grounds because
agreements were broad enough to cover intentional acts, too broad in the
category of individuals released, and "confusing and ambiguous") (review
supra note 3, www.wisbar.org/wislawmag/1997/11/pendleton.
41See Yauger, 206 Wis.
2d at 90.
42Atkins, 2005 WI 4,
¶ 25, 277 Wis. 2d 303.
43Courts in other jurisdictions
that have considered the issue of "bargaining" in exculpatory agreement
cases usually have done so in the context of whether something like
"grossly disparate bargaining power" existed between the parties and
whether the injured party had other options regarding the service
provided. See, e.g., Rowan v. Vail Holdings Inc., 31 F. Supp.
2d 889, 897-98 (D. Col. 1998); Beehner v. Cragun Corp., 636
N.W.2d 821, 828 (Minn. Ct. App. 2001); Berlangieri v. Running Elk
Corp., 76 P.3d 1098, 1113 (N.M. 2003); Moore v. Hartley Motors
Inc., 36 P.3d 628, 631-32 (Alaska 2001); Clanton v. United
Skates of Am., 686 N.E.2d 896, 899 (Ind. Ct. App. 1997);
Vodopest v. MacGregor, 913 P.2d 779, 786 (Wash. 1996).
44The precise amount of a "pay
extra" clause is a business issue that can only be resolved by a client
after the client weighs such factors as 1) the likelihood of injuries;
2) the likely amount of damages due to injuries; 3) the cost of handling
claims; 4) the likelihood that clients will choose the "pay extra"
option; and 5) the availability of insurance. The higher the amount
chosen for a "pay extra" clause, however, the more likely it would seem
that a court will conclude that no "realistic" choice was offered.
45Certification, at p. 5.
Sample Waiver Language
I have read the attached waiver of liability agreement. I realize I
am not required to sign the agreement. I freely choose either option A
or option B:
A. Pay an extra $500, and not sign the agreement:44
B. Pay nothing extra, and sign the agreement of my own free