When Are Contracts of Adhesion Binding?

In the Internet age, contracts of adhesion are common. Consumers routinely confirm their acceptance to terms and conditions that they have not read or understood.

In Apps v. Grouse Mountain Resorts Ltd., 2020 BCCA 78, the court addressed when contracts of adhesion are binding. In this case, a snowboarder from Australia was injured in the terrain park. He brought an action for negligence, the failure to warn, and for breaching the Occupiers Liability Act. The BC Court of Appeal found that the trial judge erred in upholding the waiver.

The plaintiff Mr. Apps raised “an issue that has troubled the courts ever since the Industrial Revolution: under what circumstances is such a waiver in a contract of adhesion (where the consumer must take it or leave it) binding on the consumer? This has been of particular concern where the waiver includes words excluding liability for the service provider’s own negligence.”

In the case of Mr. Apps he did not click any buttons or sign any forms. So, what brought the terms of the waiver to his attention?

Above the ticket booth was a sign that contained the terms of the waiver: “… As a condition of use of the ski area and other facilities, the ticket holder assumes all risk of personal injury, death or property loss resulting from any cause whatsoever including but not limited to: the risks, dangers and hazards of skiing…”

The Court of Appeal held that the defendant Grouse Mountain could only contract out of its duty of care under the Occupiers Liability Act if it took reasonable steps to bring the waiver clause to the plaintiff’s attention. The court held that insufficient steps were taken to bring the waiver of liability clause to the plaintiff’s attention. The more onerous the term, the more steps that must be taken to bring attention to the terms.

At paragraph 84, Justice Grauer wrote that “It will not avail the consumer to say, ‘I did not read the notice’, if the mountain took reasonable steps to draw the own negligence clause to the consumer’s attention. On the findings of the judge, it cannot be held to have done so.”

The trial judge was only permitted to consider what was posted on signs Mr. Apps could have seen at or before the time he purchased his ticket. “By the time Mr. Apps arrived at the Terrain Park, he had paid for his non-refundable ticket, taken the lift up the mountain, and had begun snowboarding. It was far too late to give notice of what was in the waiver. That had to be done at or before the ticket booth.”

After taking the “clear and easy to read” signs at the Terrain Park out of the equation, the court was left with the following findings from the trial judge.

• The sign at the ticket booth was “difficult to read”;

• The own negligence exclusion was “not highlighted or emphasized in any way”, but was buried in small print among many commas and semi-colons;

• “It is unrealistic to believe that a person approaching the ticket booth would stop in front of the window to read the sign.”

Interestingly, Mr. Apps also signed a season pass for Whistler Mountain. “Of course, having signed it, he would be bound by its terms in relation to Whistler Mountain notwithstanding that he did not read it.”

Justice Grauer held that only actual knowledge of the terms through previous dealings is relevant. In this case, previous dealings with Whistler was not relevant. Mr. Apps did not read the Whistler season pass agreement. Constructive knowledge did not apply, and could not impute knowledge to him for the Grouse Mountain.

Despite the thoroughness of the Court of Appeal’s decision, the question remains for contracts of adhesion formed over the Internet – under what circumstances should a waiver of liability be binding? How many people read and understand those terms? For example, how many people are actually consenting to apps selling their data?

(Views are my own and do not represent the views of any organization.)