Cengage Advantage Books: Fundamentals of Business Law 9th Edition by Roger LeRoy Miller

Exercise 12

Boles v. Sun Ergoline, Inc.
Supreme Court of Colorado, 222 P.3d 724 (2010).
FACTS Executive Tans operated an upright tanning booth, which was manufactured by Sun Ergoline, Inc. Before using the booth, Savannah Boles signed a release form provided by Executive Tans that contained the following exculpatory agreement: "I have read the instructions for proper use of the tanning facilities and do so at my own risk and hereby release the owners, operators, franchisor, or manufacturers, from any damage or harm that I might incur due to use of the facilities." After Boles entered the booth, several of her fingers came in contact with an exhaust fan located at the top of the booth, partially amputating them. Boles sued Sun Ergoline in a Colorado state court, asserting a strict product liability claim for personal injury. Sun Ergoline moved for summary judgment on the ground that Boles's claim was barred by the release that she had signed before using its product. The trial court agreed and granted Sun Ergoline's motion. The court of appeals affirmed the trial court's judgment, finding that the language of the release was broad enough to include any damage or harm that might occur due to Boles's use of the facilities. The court of appeals also found no violation of public policy. Boles appealed to the Colorado Supreme Court.
ISSUE Was Boles's strict product liability claim against the manufacturer of a tanning booth that partially amputated her fingers barred by assumption of risk because she had signed an exculpatory clause?
DECISION No. The Supreme Court of Colorado reversed the judgment of the appellate court and directed it to remand the case for further proceedings consistent with its opinion. The court concluded that, as a matter of public policy, assumption of risk (via the exculpatory clause) was not appropriate in a strict liability context.
REASON The reviewing court reasoned that strict product liability "is premised on the concept of enterprise liability for casting a defective product into the stream of commerce." In a strict product liability situation, the focus is on the nature of the product rather than on the conduct of the manufacturer or the person injured. The court also stated that strict product liability is driven by public policy considerations. One such consideration is the deliberate creation of economic incentives for manufacturers to improve product safety and take advantage of their unique "position to spread the risk of loss among all who use the product." The Restatement (Third) of Torts prohibits exculpatory agreements that bar or reduce otherwise valid product liability claims for personal injuries made by ordinary consumers against sellers or distributors of new products. "An agreement releasing the manufacturer from strict product liability for personal injury, in exchange for nothing more than an individual consumer's right to have or use the product, necessarily violates the public policy of this jurisdiction and is void."
FOR CRITICAL ANALYSIS-Ethical Consideration Why would the enforcement of the exculpatory clause in this case conflict with the rationale underlying strict product liability?