No. 72 December 18, 2014 543

IN THE SUPREME COURT OF THE

STATE OF OREGON

Myles A. BAGLEY,

individually,

Petitioner on Review,

and

Al BAGLEY,

individually;

and Lauren Bagley,

individually,

Plaintiffs,

v.

MT. BACHELOR, INC.,

dba Mt. Bachelor Ski and Summer Resort,

Respondent on Review,

and

John DOES 1-10,

Defendants.

(CC 08CV0118SF; CA A148231; SC S061821)

En Banc

On review from the Court of Appeals.*

Argued and submitted May 7, 2014.

Kathryn H. Clarke, Portland, argued the cause and filed 

the briefs for petitioner on review. With her on the briefs was 

Arthur C. Johnson.

Andrew C. Balyeat, Balyeat & Eager, LLP, Bend, argued 

the cause and filed the brief for respondent on review.

Michael J. Estok, Lindsay Hart, LLP, Portland, filed 

a brief on behalf of amicus curiae Oregon Association of 

Defense Counsel.

______________

* Appeal from Deschutes County Circuit Court, Stephen P. Forte, Judge. 258 

Or App 390, 310 P3d 692 (2013).
544 Bagley v. Mt. Bachelor, Inc.

Kristian Roggendorf, Roggendorf Law LLC, Lake 

Oswego, filed a brief on behalf of amicus curiae Oregon Trial 

Lawyers Association.

BREWER, J.

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.

Plaintiff brought a negligence action against defendant ski area operator 

for injuries he sustained while snowboarding over a jump in defendant’s terrain 

park. The trial court granted defendant’s summary judgment motion, agreeing 

with defendant that, prior to using defendant’s facilities, plaintiff had released 

defendant from future liability for his injuries, including those caused by defendant’s negligence, and rejecting plaintiff’s argument that enforcement of the 

release would violate public policy and would be unconscionable. The Court of 

Appeals affirmed. Held: (1) Enforcement of the release in this case would be both 

procedurally and substantively unconscionable because of the legally significant 

disparity in the parties’ bargaining power, the unfairly adhesive nature of the 

release, and the public interest that is affected by the performance of defendant’s 

private duties toward its patrons, given the large numbers of the general public 

using defendant’s facilities virtually without restriction and the degree to which 

the personal safety of defendant’s patrons is subject to the risk defendant’s carelessness; and (2) those unconscionability considerations are not outweighed by 

defendant’s interest in enforcing the release, in light of the fact that defendant 

was in a better position than plaintiff to guard against risks created by its own 

conduct.

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.
Cite as 356 Or 543 (2014) 545

BREWER, J.

The issue on review in this case is whether an anticipatory release1

 of a ski area operator’s liability for its own 

negligence in a ski pass agreement is enforceable in the face 

of an assertion that the release violates public policy and 

is unconscionable. Plaintiff suffered serious injuries while 

snowboarding over a jump in defendant ski area operator’s 

“terrain park,” and brought this action alleging that defendant was negligent in the design, construction, maintenance, 

and inspection of the jump. Defendant moved for summary 

judgment based on an affirmative defense of release; plaintiff filed a cross-motion for partial summary judgment on 

the ground that the release was unenforceable as a matter 

of law. The trial court granted defendant’s summary judgment motion and denied plaintiff’s cross-motion. Plaintiff 

appealed, asserting, among other arguments, that the trial 

court erred in concluding that the release did not violate 

public policy and that it was neither substantively nor procedurally unconscionable. The Court of Appeals affirmed. 

Bagley v. Mt. Bachelor, Inc., 258 Or App 390, 310 P3d 692 

(2013). Because we conclude that enforcement of the release 

would be unconscionable, we reverse and remand.

FACTS AND PROCEDURAL BACKGROUND

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 plaintiff’s cross-motion. Id.; Vaughn v. First 

Transit, Inc., 346 Or 128, 132, 206 P3d 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 

1 By “anticipatory release,” we refer to an exculpatory agreement that purports to immunize—before an injury occurs—the released party from liability for 

its own tortious conduct.
546 Bagley v. Mt. Bachelor, Inc.

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:

“In consideration of the use of a Mt. Bachelor pass and/or 

Mt. Bachelor’s premises, I/we agree to release and indemnify Mt. Bachelor, Inc., its officers and directors, owners, 

agents, landowners, affiliated companies, and employees 

(hereinafter ‘Mt. Bachelor, Inc.’) from any and all claims 

for property damage, injury, or death which I/we may suffer or for which I/we may be liable to others, in any way 

connected with skiing, snowboarding, or snowriding. This 

release and indemnity agreement shall apply to any claim 

even if caused by negligence. The only claims not released 

are those based upon intentional misconduct.

“*****

“The undersigned(s) have carefully read and understand this agreement and all of its terms on both sides 

of this document. This includes, but is not limited to, the 

duties of skiers, snowboarders, or snowriders. The undersigned(s) understand that this document is an agreement 

of release and indemnity which will prevent the undersigned(s) or the undersigneds’ estate from recovering damages from Mt. Bachelor, Inc. in the event of death or injury 

to person or property. The undersigned(s), nevertheless, 

enter into this agreement freely and voluntarily and agree 

it is binding on the undersigned(s) and the undersigneds’ 

heirs and legal representatives.

“By my/our signature(s) below, I/we agree that this 

release and indemnity agreement will remain in full force 
Cite as 356 Or 543 (2014) 547

and effect and I will be bound by its terms throughout this 

season and all subsequent seasons for which I/we renew 

this season pass.

“See reverse side of this sheet ** * for duties of skiers, 

snowboarders, or snow riders which you must observe.”

(Capitalization omitted.)2 The reverse side of the document 

detailed the “Duties of Skiers” under ORS 30.985 and ORS 

30.990 and also included a printed notification that “Skiers/

Snowboarders/Snowriders Assume Certain Risks” under 

ORS 30.975—the “inherent risks of skiing.”3

On November 18, 2005, plaintiff began using the 

pass, which stated, in part:

“Read this release agreement

“In consideration for each lift ride, the ticket user 

releases and agrees to hold harmless and indemnify 

Mt. Bachelor, Inc., and its employees and agents from all 

claims for property damage, injury or death even if caused 

by negligence. The only claims not released are those based 

upon intentional misconduct.”

(Capitalization omitted.) Further, the following sign was 

posted at each of defendant’s ski lift terminals:

“YOUR TICKET IS A RELEASE

“The back of your ticket contains a release of all claims 

against Mt. Bachelor, Inc. and its employees or agents. 

2 Although defendant relies on several documents that, it asserts, separately 

and collectively released it from liability for plaintiff’s injuries, for convenience we 

refer to those documents in the singular throughout this opinion as “the release.” 

In addition to the releases discussed in the text, plaintiff’s father also executed a 

“minor release and indemnity agreement” on plaintiff’s behalf, containing essentially the same terms as the other releases, because plaintiff was not yet eighteen 

years old when he bought the season pass. Plaintiff asserted before the trial court 

and the Court of Appeals that he was entitled to—and effectively did—disavow 

the release after he reached majority. For reasons explained in its opinion, the 

Court of Appeals affirmed the trial court’s rejection of that argument. Plaintiff 

did not seek review of that holding in this court and we do not address it here.

3 As elaborated below, Oregon has enacted statutes specifically pertaining 

to skiing and ski areas. See ORS 30.970 - 30.990. Those statutes, among other 

provisions, set out the “duties” of skiers, require that ski area operators inform 

skiers of those duties, establish notice requirements and a statute of limitations 

pertaining specifically to injury or death while skiing, and provide that those 

who engage in the sport of skiing accept and assume the risks inherent in that 

activity.
548 Bagley v. Mt. Bachelor, Inc.

Read the back of your ticket before you ride any lifts or use 

any of the facilities of Mt. Bachelor, Inc. If you purchase 

a ticket from someone else, you must provide this ticket 

release information to that person or persons.

“Skiers and lift passengers who use tickets at this 

resort release and agree to hold harmless and indemnify 

Mt. Bachelor, Inc., its employees and agents from all claims 

for property damage, injury or death which he/she may suffer or for which he/she may be liable to others, arising out 

of the use of Mt. Bachelor’s premises, whether such claims 

are for negligence or any other theory of recovery, except for 

intentional misconduct.

“If you do not agree to be bound by the terms and conditions of the sale of your ticket, please do not purchase the 

ticket or use the facilities at Mt. Bachelor.

“Presentation of this ticket to gain access to the premises and facilities of this area is an acknowledgment of your 

agreement to the terms and conditions outlined above.”

(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 
Cite as 356 Or 543 (2014) 549

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 plaintiff’s 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:

“We assume without deciding that the ‘void as contrary 

to public policy’ doctrine pertaining to this type of case has 

not been superseded by later-evolved principles concerning 

substantive unconscionability. See Restatement[ (Second) 

of Contracts], § 208 comment a [(1981)] (unconscionability 

analysis generally ‘overlaps’ with public-policy analysis).”

Bagley, 258 Or App at 403 n 7. 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 
550 Bagley v. Mt. Bachelor, Inc.

405 (“[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 this case, such as 

training for search-and-rescue personnel, do not constitute 

essential public services. Id. at 406. Third, the court stated 

that plaintiff’s claims were based on ordinary negligence 

and did not implicate a violation of any heightened duty of 

care. Id.

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. The court also concluded that the release was 

not essentially unfair and, therefore, was not substantively 

unconscionable. Id. at 409. 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.

For those reasons, the court affirmed the trial court’s

summary judgment rulings and its dismissal of plaintiff’s 

action.

ANALYSIS

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 
Cite as 356 Or 543 (2014) 551

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 P2d 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 P2d 

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 P2d 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:

“It is sometimes said that compensation for losses is the 

primary function of tort law * * * [but it] is perhaps more 

accurate to describe the primary function as one of determining when compensation is to be required.

“*****

“[Additionally, t]he ‘prophylactic’ factor of preventing 

future harm has been quite important in the field of torts. 

The courts are concerned not only with compensation of the 

victim, but with admonition of the wrongdoer.”

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 
552 Bagley v. Mt. Bachelor, Inc.

is to distribute the risk of injury to or among responsible 

parties. Prosser and Keeton, § 4, 24-25.4

One way in which courts have placed limits on the 

freedom of contract is by refusing to enforce agreements 

that are illegal. Uhlmann v. Kin Daw, 97 Or 681, 688, 193

P 435 (1920) (an illegal agreement is void and unenforceable). According to Uhlmann:

“An agreement is illegal if it is contrary to law, morality 

or public policy. Plain examples of illegality are found in 

agreements made in violation of some statute; and, stating the rule broadly, an agreement is illegal if it violates a 

statute or cannot be performed without violating a statute.”

Id. at 689 (internal citation omitted); see also Eldridge et al. 

v. Johnston, 195 Or 379, 405, 245 P2d 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 P2d 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.

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. 

4 See also Rizutto v. Davidson Ladders, Inc., 280 Conn 225, 235, 905 A2d 

1165 (2006) (fundamental purposes of the tort system are “compensation of innocent parties, shifting the loss to responsible parties or distributing it among 

appropriate entities, and deterrence of wrongful conduct.”).
Cite as 356 Or 543 (2014) 553

Taco Time Int’l, Inc., 297 Or 10, 681 P2d 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:

“The concept of unconscionability was meant to counteract 

two generic forms of abuses: the first of which relates to procedural deficiencies in the contract formation process, such 

as deception or a refusal to bargain over contract terms, 

today often analyzed in terms of whether the imposedupon party had meaningful choice about whether and how 

to enter the transaction; and the second of which relates 

to the substantive contract terms themselves and whether 

those terms are unreasonably favorable to the more powerful party, such as terms that impair the integrity of the 

bargaining process or otherwise contravene the public 

interest or public policy; terms (usually of an adhesion or 

boilerplate nature) that attempt to alter in an impermissible manner fundamental duties otherwise imposed by the 

law, fine-print terms, or provisions that seek to negate the 

reasonable expectations of the nondrafting party, or unreasonably and unexpectedly harsh terms having nothing to 

do with price or other central aspects of the transaction.”

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.5

5 This court has not distinguished between contracts that are illegal because 

they violate public policy and contracts that are unenforceable because they are 

unconscionable. However, a difference in focus between the two concepts has been 

described in this way:

“[O]ur public policy analysis asks whether the contract provision at issue 

threatens harm to the public as a whole, including by contravening the constitution, statutes, or judicial decisions of [this state]. In contrast, an unconscionability analysis asks whether the agreement, by its formation or by its 

terms, is so unfair that the court cannot enforce it consistent with the interests of justice.”

Phoenix Ins. Co. v. Rosen, 242 Ill 2d 48, 61, 949 NE2d 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.
554 Bagley v. Mt. Bachelor, Inc.

Recognizing that convergence, this court often has 

relied on public policy considerations to determine whether a 

contract or contract term is sufficiently unfair or oppressive 

to be deemed unconscionable. See, e.g., William C. Cornitius, 

Inc. v. Wheeler, 276 Or 747, 754-55, 556 P2d 666 (1976) (treating lessee’s unconscionability defense as grounded in public 

policy); Cone v. Gilmore, 79 Or 349, 352-54, 155 P 192 (1916)

(analyzing unconscionability challenge to contract enforcement based on public policy considerations); Balfour v. Davis 

14 Or 47, 53, 12 P 89 (1886) (referring to unconscionability 

interchangeably with public policy considerations). Other 

authorities also have described the two doctrines in functionally the same terms, see, e.g., E. Allen Farnsworth, 1 

Farnsworth on Contracts, § 4.28, 577 (3d ed 2004) (comparing unconscionability to violation of public policy), or 

as involving substantially overlapping considerations, see 

Restatement (Second) of Contracts § 208 comment a (1981) 

(policy against unconscionable contracts or contract terms 

“overlaps with rules which render particular bargains or 

terms unenforceable on grounds of 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.6

Oregon courts have recognized their authority to 

refuse to enforce unconscionable contracts since the nineteenth century. See Balfour, 14 Or 47 (refusing to award 

6 We emphasize that it is not necessary to decide in this case whether the doctrines always are identical in practical effect or whether they may vary in their 

application depending on the particular circumstances of a given case. It suffices 

to say that we discern no difference in their practical application in this case and, 

therefore, for the sake of convenience, we consider plaintiff’s violation of public 

policy theory in the context of his unconscionability arguments.
Cite as 356 Or 543 (2014) 555

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 P2d 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 P2d 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 P3d 940, 948 (2007); Acorn v. Household Intern. 

Inc., 211 F Supp 2d 1160, 1168 (ND 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 takeit-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 the contract, rather than 

the circumstances of formation, and focuses on whether 

the substantive terms contravene the public interest or 

public policy.7 See Restatement § 208 comment a; Williston

7 It sometimes can be difficult to categorize the factors on which a determination of unconscionability may be based as distinctly procedural or substantive, 

and even factors usually considered in assessing procedural unconscionability 

can help establish a violation of public policy. For example, the passage quoted 

above from Williston on Contracts § 18.10, 356 Or at ___ suggests that adhesive 

and fine-print terms may be substantively unconscionable. Indeed, the author 
556 Bagley v. Mt. Bachelor, Inc.

on Contracts § 18.10 at 91. Both procedural and substantive 

deficiencies—frequently in combination—can preclude enforcement of a contract or contract term on unconscionability 

grounds. Restatement § 208 comment a.8

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 (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.9 Id.

goes on to say that “[t]he distinction between procedural and substantive abuses 

*** may become quite blurred.” Williston on Contracts § 18.10 at 108-111.

8 In some jurisdictions, courts require both procedural and substantive 

unconscionability before they will invalidate a contract. See, e.g., Armendariz v. 

Found. Health Psychcare Servs., Inc., 24 Cal 4th 83, 114, 99 Cal Rptr 2d 745, 6 P3d 

669, 690 (2000) (procedural and substantive unconscionability must both be present in order for a court to exercise its discretion to refuse to enforce a contract or 

clause under the doctrine of unconscionability); Blue Cross Blue Shield of Ala. v. 

Rigas, 923 So 2d 1077, 1087 (Ala 2005) (“To avoid an arbitration provision on the 

ground of unconscionability, the party objecting to arbitration must show both 

procedural and substantive unconscionability.”). This court has not addressed 

that issue, and because, as explained below, we conclude that both procedural 

and substantive considerations support the conclusion that the release here is 

unconscionable, we do not decide that issue in this case.

9 Many jurisdictions that limit or prohibit the use of anticipatory releases 

from negligence liability on public policy grounds do so as a matter of statutory 

enactment, rather than common law. For example, Great Britain and the States 

of Louisiana and Montana have statutory provisions that forbid contracts exculpating one party from liability for negligence that results in personal injury. 

Unfair Contract Terms Act of 1977, ch 50, § 2(1) (Eng) (“A person cannot by reference to any contract term or to a notice given to persons generally or to particular 

persons exclude or restrict his liability for death or personal injury resulting from 

negligence.”); La Civ Code Ann art 2004 (“Any clause is null that, in advance, 

excludes or limits the liability of one party for causing physical injury to the other 

party.”); Mont Code Ann § 28-2-702 (“All contracts that have for their object, 

directly or indirectly, to exempt anyone from responsibility * ** for violation of 

law, whether willful or negligent, are against the policy of the law.”); see also

Miller v. Fallon County, 222 Mont 214, 221, 721 P2d 342 (1986) (under statute, 
Cite as 356 Or 543 (2014) 557

Frequently, however, the argument that a contract 

term is sufficiently unfair or oppressive as to be unenforceable is grounded in one or more factors that are not expressly 

codified; in such circumstances, the common law has a significant role to play. As the commentary to the Restatement 

(Second) of Contracts explains:

“Only infrequently does legislation, on grounds of public 

policy, provide that a term is unenforceable. When a court 

prospective release from liability for negligence is against the policy of the law 

and illegal, despite being a private contract between two persons without significant public implications).

 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. NY 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.” NC Gen 

Stat § 99C-2(c)(7); NC Gen Statute § 9C-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 (WD NC 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 P3d 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.”); NM Stat Ann § 24-15-11 

(to same effect); ND 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 

P3d 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).
558 Bagley v. Mt. Bachelor, Inc.

reaches that conclusion, it usually does so on the basis of a 

public policy derived either from its own perception of the 

need to protect some aspect of the public welfare or from 

legislation that is relevant to the policy although it says 

nothing explicitly about enforceability.”

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:

“Agreements to exonerate a party from liability or to 

limit the extent of the party’s liability for tortious conduct 

are not favorites of the courts but neither are they automatically voided. The treatment courts accord such agreements 

depends upon the subject and terms of the agreement and 

the relationship of the parties.”

K-Lines v. Roberts Motor Co., 273 Or 242, 248, 541 P2d 1378 

(1975).

In K-Lines, this court upheld a limitation of liability 

contained in a commercial sales agreement. The court held 

that the fact

“[t]hat one party may possess greater financial resources 

than the other is not proof that such a disparity of bargaining power exists that a limitation of liability provisions 

should be voided.

“When the parties are business concerns dealing in 

a commercial setting and entering into an unambiguous 

agreement with terms commonly used in commercial transactions, the contract will not be deemed a contract of adhesion in the absence of evidence of unusual circumstances.”

Id. at 252-53. The court also noted that, in an earlier decision, it had stated:
Cite as 356 Or 543 (2014) 559

“‘There is nothing inherently bad about a contract provision which exempts one of the parties from liability. The 

parties are free to contract as they please, unless to permit 

them to do so would contravene the public interest.’”

Id. at 248 (quoting Irish & Swartz Stores v. First Nat’l Bk., 

220 Or 362, 375, 349 P2d 814 (1960), overruled on other 

grounds by Real Good Food v First National Bank, 276 Or 

1057, 557 P2d 654 (1976)).10

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:

“Where the defendant is a common carrier, an innkeeper, 

a public warehouseman, a public utility, or is otherwise 

charged with a duty of public service, and the agreement 

to assume the risk relates to the defendant’s performance 

of any part of that duty, it is well settled that it will not 

be given effect. Having undertaken the duty to the public, which includes the obligation of reasonable care, such 

defendants are not free to rid themselves of their public 

obligation by contract, or by any other agreement.”

Id. at 1061 (quoting Restatement (Second) of Torts § 496B 

comment g (1965)).11 The court in Real Good Food concluded 

10 In K-Lines, which, as noted, involved a commercial transaction, the 

court distinguished between releases from liability for ordinary negligence and 

releases involving more serious misconduct, concluding that the latter violate 

public policy, but that the former are not necessarily unenforceable. K-Lines, 273 

Or at 249.

11 Restatement (Second)of Torts § 496B provides:

“A plaintiff who by contract or otherwise expressly agrees to accept a risk 

of harm arising from the defendant’s negligent or reckless conduct cannot 

recover for such harm, unless the agreement is invalid as contrary to public 

policy.”

 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.
560 Bagley v. Mt. Bachelor, Inc.

that “[b]anks, like common carriers and utility companies, 

perform an important public service,” and the release therefore violated public policy and was unenforceable. 276 Or at 

1061.

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 P2d 926 (1969) (so stating); Estey 

v. MacKenzie Engineering Inc., 324 Or 372, 376-77, 927 P2d 

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.12

12 Justice Peterson eloquently described the role of societal expectations in 

informing the development of both the common law and legislation:
Cite as 356 Or 543 (2014) 561

With those principles in mind, we first consider the 

factors that usually are described as procedural, viz., those 

pertaining to the formation of the agreement. Plaintiff does 

not contend that the release was inconspicuous or ambiguous; that is, plaintiff does not contend that he was surprised 

by its terms. Thus, that factor weighs in favor of enforcement.

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

“where there is such a disparity in bargaining power 

between the parties that the agreement does not represent 

a free choice on the part of the plaintiff. The basis for such 

“The beauty and strength of the common-law system is its infinite adaptability to societal change. Recent decisions of this court are illustrative. In 

Heino v. Harper, 306 Or 347, 349-50, 759 P2d 253 (1988), the court abolished 

interspousal immunity, holding ‘that the common-law rule of interspousal 

immunity is no longer available in this state to bar negligence actions 

between spouses.’ In Winn v. Gilroy, 296 Or 718, 734, 681 P2d 776 (1984), the 

court abolished parental tort immunity for negligent injury to minor children. Nineteen years earlier, in Wights v. Staff Jennings, 241 Or 301, 310, 405 

P2d 624 (1965), stating that ‘it is the function of the judiciary to modify the 

law of torts to fit the changing needs of society,’ the court held that a seller 

of a product may be held strictly liable for injuries to a plaintiff not in privity 

with the seller.

“The development of the common law occurs in an environment in which 

tensions abound. On occasion, the Legislative Assembly passes laws in 

response to decisions of this court. Products liability decisions of this court 

led to the enactment of a series of products liability statutes now found in 

ORS 30.900 to 30.927. A decision of this court involving an injury to a skier, 

Blair v. Mt. Hood Meadows Development Corp., 291 Or 293, 630 P2d 827, 

modified, 291 Or 703, 634 P2d 241 (1981), led to the enactment of statutes 

concerning skiing activities, ORS 30.970 to 30.990.

“On the other hand, this court, in deciding common-law issues presented 

to it, has ascertained public policy by looking to legislative enactments. The 

legislature is incapable of passing laws that govern every conceivable situation that might arise, however. The common-law court is the institution 

charged with the formulation and application of rules of governing law in 

situations not covered by constitution, legislation, or rules.”

Buchler v. Oregon Corrections Div., 316 Or 499, 518-19, 853 P2d 798 (1993) 

(Peterson, J., concurring).
562 Bagley v. Mt. Bachelor, Inc.

a result is the policy of the law which relieves the party 

who is at such a disadvantage from harsh, inequitable, and 

unfair contracts which he is forced to accept by the necessities of his situation. The disparity in bargaining power 

may arise from the defendant’s monopoly of a particular 

field of service, from the generality of use of contract clauses 

insisting upon assumption of risk by those engaged in such 

a field, so that the plaintiff has no alternative possibility of 

obtaining the service without the clause; or it may arise from 

the exigencies of the needs of the plaintiff himself, which 

leave him no reasonable alternative to the acceptance of 

the offered terms.”

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.13 Simply put, plaintiff had no meaningful alternative 

to defendant’s take-it-or-leave-it terms if he wanted to participate in downhill snowboarding. Although that factor is 

not, by itself, dispositive,

“[w]hen one party is in such a superior bargaining position 

that it totally dictates all terms of the contract and the only 

option presented to the other party is to take it or leave 

it, some quantum of procedural unconscionability is established. The party who drafts such a contract of adhesion 

bears the responsibility of assuring that the provisions of 

the contract are not so one-sided as to be unconscionable.”

Strand v. U.S. Bank Nat. Ass’n, 693 NW2d 918, 925 (ND 

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 

13 In an excerpt from the transcript of plaintiff’s deposition that was included 

in the summary judgment record, plaintiff testified that he had never been to a 

ski resort where a release such as the one at issue here was not required.
Cite as 356 Or 543 (2014) 563

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. 

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—invitees14—with respect to the condition of their 

premises that exceeds the general duty of care to avoid 

unreasonable risks of harm to others. Hagler v. Coastal 

Farm Holdings, Inc., 354 Or 132, 140-41, 309 P3d 1073 

(2013); Garrison v. Deschutes County, 334 Or 264, 272, 48 

P3d 807 (2002) (business invitee rule is a “special duty”). As 

this court explained in Woolston v. Wells, 297 Or 548, 557-

58, 687 P2d 144 (1984):

“In general, it is the duty of the possessor of land to make 

the premises reasonably safe for the invitee’s visit. The possessor must exercise the standard of care above stated to 

discover conditions of the premises that create an unreasonable risk of harm to the invitee. The possessor must 

14 An “invitee” is “[a] person who has an express or implied invitation to enter 

or use another’s premises, such as a business visitor or a member of the public to 

whom the premises are held open.” Bryan A Garner, Black’s Law Dictionary 846 

(8th ed 1999).
564 Bagley v. Mt. Bachelor, Inc.

exercise that standard of care either to eliminate the condition creating that risk or to warn any foreseeable invitee 

of the risk so as to enable the invitee to avoid the harm.”

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 P2d 1287 (1981) (so stating); Mickel v. Haines 

Enterprises, Inc., 240 Or 369, 371-72, 400 P2d 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:

“In accordance with ORS 31.600 [pertaining to contributory negligence] and notwithstanding ORS 31.620 (2) 

[abolishing the doctrine of implied assumption of risk], an 

individual who engages in the sport of skiing, alpine or nordic, accepts and assumes the inherent risks of skiing insofar as they are reasonably obvious, expected or necessary.”

ORS 30.970(1) describes “inherent risks of skiing”:

“‘Inherent risks of skiing’ includes, but is not limited to, 

those dangers or conditions which are an integral part of 

the sport, such as changing weather conditions, variations 

or steepness in terrain, snow or ice conditions, surface or 

subsurface conditions, bare spots, creeks and gullies, forest 

growth, rocks, stumps, lift towers and other structures and 

their components, collisions with other skiers and a skier’s 

failure to ski within the skier’s own ability.”

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 
Cite as 356 Or 543 (2014) 565

those conditions are not inherent to the activity. See Nolan 

v. Mt. Bachelor, Inc., 317 Or 328, 336, 856 P2d 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 commonlaw 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.15 However, courts in other jurisdictions 

15 See, e.g., Malecha v. St. Croix Valley Skydiving Club, Inc., 392 NW 2d 727 

(Minn App 1986) (upholding an exculpatory agreement entered into between a 

skydiving operation and a patron); Chepkevich v. Hidden Valley Resort, 607 Pa 1, 

2 A3d 1174 (2010) (skiing); Pearce v. Utah Athletic Foundation, 179 P3d 760 (Utah 

2008) (bobsledding); Benedek v. PLC Santa Monica, LLC, 104 Cal App 4th 1351, 
566 Bagley v. Mt. Bachelor, Inc.

have taken the opposite approach, concluding that, regardless of whether the release involves an essential public service, anticipatory releases that immunize a party from the 

consequences of its own negligence can violate public policy 

or be unconscionable.

For example, in Dalury v. S-K-I, Ltd., 164 Vt 329, 

670 A2d 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 A2d 

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 the defendant ski area operator, alleging that 

it had negligently designed, built, and placed the maze pole. 

The trial court granted the defendant’s motion for summary judgment based on an anticipatory release that the 

plaintiff had signed absolving the defendant of liability for 

negligence.

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 A2d 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.

129 Cal Rptr 2d 197 (2002) (health club); Henderson v. Quest Expeditions, Inc., 

174 SW3d 730, (Tenn Ct App 2005) (whitewater rafting).
Cite as 356 Or 543 (2014) 567

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

“[d]efendants, not recreational skiers, have the expertise 

and opportunity to foresee and control hazards, and to 

guard against the negligence of their agents and employees. They alone can properly maintain and inspect their 

premises, and train their employees in risk management. 

They alone can insure against risks and effectively spread 

the cost of insurance among their thousands of customers. 

Skiers, on the other hand, are not in a position to discover 

and correct risks of harm, and they cannot insure against 

the ski area’s negligence.

“If defendants were permitted to obtain broad waivers 

for their liability, an important incentive for ski areas to 

manage risk would be removed with the public bearing the 

cost of the resulting injuries. * * * It is illogical, in these 

circumstances, to undermine the public policy underlying 

business invitee law and allow skiers to bear risks they 

have no ability or right to control.”

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 US 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 
568 Bagley v. Mt. Bachelor, Inc.

participant, insofar as the risks were obvious and necessary.16 The court stated that “[a] ski area’s own negligence 

*** is neither an inherent risk nor an obvious and necessary one in the sport of skiing,” and, therefore, “a skier’s 

assumption of the inherent risks of skiing does not abrogate 

the ski area’s duty to warn of or correct dangers which in the 

exercise of reasonable prudence in the circumstances could 

have been foreseen and corrected.” Dalury, 670 A2d at 800 

(internal quotation marks omitted).17

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 A2d 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 (“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 

16 Vermont Statutes Annotated title 12, section 1037, provides:

“Notwithstanding the provisions of section 1036 of this title, a person 

who takes part in any sport accepts as a matter of law the dangers that 

inhere therein insofar as they are obvious and necessary.”

17 For similar reasons, the Connecticut Supreme Court also has declined to 

enforce an anticipatory release of negligence liability in the face of the defendant’s 

contention that recreational activities do not implicate the public interest. Hanks 

v. Powder Ridge Restaurant Corp., 276 Conn 314, 885 A2d 734 (2005). Hanks 

was a negligence action brought by a plaintiff who was injured when his foot was 

caught between his snowtube and the artificial bank of a snowtubing run at a ski 

resort operated by the defendant. The defendant relied on an anticipatory release 

that the plaintiff had signed that purported to absolve the defendant from liability for its negligence. The court acknowledged that the release was conspicuous 

and unambiguous, but ultimately agreed with the Vermont Supreme Court that 

determining what constitutes the public interest required consideration of all 

relevant circumstances, including that the plaintiff lacked sufficient knowledge 

and authority to discern whether, much less ensure that, the snowtubing runs 

were maintained in a reasonably safe condition. Id. at 331. Thus, the court held, 

“it is illogical to permit snowtubers, and the public generally, to bear the costs of 

risks that they have no ability or right to control.” Id. at 332.
Cite as 356 Or 543 (2014) 569

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.18

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; Garrison, 

334 Or at 272. 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 A2d 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 (WD NC 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 contract[ing] 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 compels enforcement of the release in this case. 

18 Public accommodations laws that prohibit discrimination against potential users of the facility are just one example of limitations imposed by law that 

affect the use of defendant’s premises. See, e.g., ORS 447.220 (explaining purpose of ORS 447.210-280 to make places of public accommodation accessible to 

persons with disability); ORS 447.210 (defining public accommodation to include 

“places of recreation”); ORS 659A.403 (prohibiting discrimination in places of 

public accommodation); ORS 659A.400 (defining places of public accommodation 

for purposes of ORS 659A.403 to include places offering “amusements”).
570 Bagley v. Mt. Bachelor, Inc.

Instead, we conclude that defendant’s business operation is 

sufficiently tied to the public interest as to require the performance of its private duties to its patrons.

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. 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 

plaintiff’s 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.19

SUMMARY AND APPLICATION

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 

19 Defendant does not contend that the release would be enforceable against 

a claim based on alleged gross negligence or reckless conduct.
Cite as 356 Or 543 (2014) 571

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,

“[W]hen the plaintiff undertook this activity, he exposed 

himself to a high risk of injury. Only he controlled his 

speed, course, angle, ‘pop’ and the difficulty of his aerial 

maneuver. Skiing and snowboarding requires [sic] the 

skier to exercise appropriate caution and good judgment. 

Sometimes, even despite the exercise of due care, accidents 

and injuries occur.”

Further, defendant contends, denying enforcement of such 

a release

“improperly elevates premises liability tort law above the 

freedom to contract, fails to take into account the countervailing policy interest of providing recreational opportunities to the public, fails to recognize that certain recreational activities are inherently dangerous and fails to consider the fact that the ski area operator has little, if any, 

control over the skier/snowboarder.”
572 Bagley v. Mt. Bachelor, Inc.

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.20 Even 

in the context of expert snowboarding in defendant’s terrain 

park, defendant was in a better position than its invitees to 

guard against risks of harm created by its own conduct.

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 

20 We reiterate that the issues of whether defendant actually was negligent 

in one or more of the particulars alleged by plaintiff, whether and the extent to 

which plaintiff was comparatively negligent, and the extent to which either party’s negligence actually caused plaintiff’s injuries, are not before us on review.
Cite as 356 Or 543 (2014) 573

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.21 And, 

because the release is unenforceable, genuine issues of fact 

exist that preclude summary judgment in defendant’s favor. 

It follows that the trial court erred in granting defendant’s 

motion for summary judgment and in denying plaintiff’s 

cross-motion for partial summary judgment, and that the 

Court of Appeals erred in affirming the judgment dismissing plaintiff’s action.

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.

21 By so concluding, we do not mean to suggest that a business owner or operator never may enforce an anticipatory release or limitation of negligence liability 

from its invitees. As explained, multiple factors may affect the analysis, including, among others, whether a legally significant disparity in the parties’ bargaining power existed that made the release or limitation unfairly adhesive, whether 

the owner/operator permitted a patron to pay additional reasonable fees to obtain 

protection against negligence, the extent to which the business operation is tied 

to the public interest, including whether the business is open to and serves large 

numbers of the general public without restriction, and the degree to which the 

personal safety of the invitee is subjected to the risk of carelessness by the owner/

operator.