Question

Recently, the Pennsylvania Superior Court addressed the validity of an exculpatory clause within a gym membership agreement. Exculpatory clauses and waivers of liability are enforceable, provided they are conspicuous. In certain circumstances, the waiver provision can be enforced even when it is unread, if a reasonable person should have noticed the clause

In this case, Melinda Hinkal asserted a negligence claim against Gavin Pardoe, a personal trainer working at Gold’s Gym. Ms. Hinkal also brought respondeat superior claims against Gold’s Gym and TRT Holdings (Defendants).

While exercising at the gym under Mr. Pardoe’s direction, Ms. Hinkal alleged that she suffered an injury that ruptured a disc in her neck, requiring two separate surgeries. She claimed that Mr. Pardoe negligently put too much weight on the workout equipment and then instructed her to continue her workout without noticing her injury. Defendants filed a summary judgment motion on the grounds that Ms. Hinkal signed a guest agreement containing legal waivers of liability, barring Ms. Hinkal’s claims against them. The trial court granted the motion for summary judgment, and Ms. Hinkal appealed.

On appeal, Ms. Hinkal asserted that the waiver provision, on the reverse of the membership agreement, was not valid and enforceable. She claimed that it was inconspicuous and not sufficient to give notice of its contents and significance.

The court examined the agreement itself and the waiver of liability/assumption of risk statement. Notably, the court stated the agreement does not provide a space for initials to indicate acknowledgement and acceptance of the additional terms.   In certain circumstances, to determine if a reasonable person should have noticed an exculpatory clause, the court considers factors such as the clause’s placement in the document, the size of the clause’s print, and whether it was highlighted in all capital letters, or a differing font or color.

In this case, the court applied the relevant factors and determined that the exculpatory clause in the Gold’s Gym membership agreement was not enforceable, since it was not sufficiently conspicuous. First, it was printed on the reverse of the one-page document. Second, the signature line was on the other side of the document. Third, the font was the same size as the other terms and was difficult to read.

In this case, the appellate court stated that the defendants took no steps to alert Ms. Hinkal that by signing the membership agreement, she was waiving her right to initiate a personal injury action against Gold’s Gym. In conclusion, the court stated they did not find that Ms. Hinkal’s intent was to waive her right to bring a lawsuit against the gym.

The appellate court reversed the trial court’s granting of the summary judgment motion. They remanded for further proceedings.

What indicated that the terms in the agreement at issue in this case were accepted?

What were the appellant’s arguments in support of her claim? Which of those contention did the court imply was irrelevant? Why?

How did the court distinguish its conclusion in this case from its decisions in Beck-Hummel?

Answer 1

1) The indication that the terms of this agreement were accepted were confirmed through asking the client to sign the agreement on the signature line located at the front side of the one page agreement. This was the only place where the signature was required stating that all the terms and conditions were understood and accepted.

2) The appellant argued that the terms and conditions stating that the gym and it's management was not responsible for any injury and no legal action could be initiated against them in case of injury to the member was inconspicuous and placed at the reverse of the agreement, thereby misleading through indication that it is insignificant. No signature is required at the bottom of the second page ensuring that this particular terms and conditions have been read and understood. Also the font size and the spacing applied for a clause, which is legally very important in an agreement, indicating waiver of liability and assumption of risk, has not been awarded the due importance through highlighting or bold script. In fact it has been printed light grey ink on Pink carbon paper making it appear very inconspicuous and difficult to read. Therefore the appellant was unaware that she was waiving her legal rights and becoming personally liable for all risk. The court implied that the contention of the gym regarding the appellants signature on the guest card was irrelevant, as the injury that was received by the appellant was not while she was against member but after she has signed the agreement and become a regular member of the gym. The court also noted that the guest card had not been used even once during the 6 day trial period that had been offered to the appellant. Since this guest agreement and card were never utilised by the client and did not hold any validity became as it became void once the clients signed the membership agreement. Therefore the legal waiver of liability mentioned there in was irrelevant.

Distinguished its conclusion in this case from his decisions in Beck-Hummel bailing out the intricacies involved for the basis of it's decision. As the other case was based on an unsigned ticket where exculpatory clause can be enforced without signature provided this is communicated in a clear manner to the users of the ski Resort. The similarity here was that in both cases the legal waiver was not sufficiently highlighted with reference to its importance for ensuring that anyone reading it would be aware of the same. The difference in the cases was that the agreement of Gold's Gym clearly mentioned on the first page that the terms and conditions at the back of the page also need to be read before signing the agreement. However in no way did it indicate the importance of the contents or the waiver of legal rights while making this request. Therefore, unlike the ski resort, in spite of the gym having indicated the existence of further terms and conditions on the other side which a member should read it failed to inform the member regarding the utmost importance and significance of these conditions unawareness of which could cause a significant loss to them or abrogate their rights.