Cases to Watch (CO Supreme Court)

Today the Supreme Court of Colorado granted cert. in Boles v. Sun Ergoline, Inc., No. 08 SC970. The issue is:

Whether the public policy of Colorado allows enforcement of an exculpatory agreement purporting to release a manufacturer from liability for possible future injuries caused by the manufacturer’s defective products.

The Court of Appeals didn’t designate its opinion for official publication, so that opinion isn’t publicly available.

Exculpatory clauses are nominally “disfavored” in this state, but they’re generally enforceable on some ridiculous freedom-of-contract theory absent some truly horrific disparity of bargaining power. Colorado also adheres to the near-universal rule that excupatory clauses are enforceable as against negligence claims, but are void as against public policy as applied to claims arising from willful and wanton conduct or some higher level of misconduct.

One of the issues in Boles will surely be what rules apply to enforcing exculpatory clauses as to “strict liability” claims. Strict liability means liability without proof of fault. In the product context, the idea is that someone injured in a product-related accident needn’t show that the manufacturer was negligent in designing, making or marketing the product. All the plaintiff has to do is prove that the product was defective and that the defect caused the plaintiff’s injuries. As a practical matter, though, proving that a product is “defective” under the applicable legal standards often involves proving fault on the manufacturer’s part.

In other states, the enforceability of exclupatory clauses as to strict liability claims often boils down to the identity of the plaintiff. If the person bringing the claim is a sophisticated commercial entity and the clause is contained in a contract entered into by the plaintiff  and the  defendant, the clause is likely enforceable. If the plaintiff is some poor schulb who got hurt by a defective product and lacks any direct contractual relationship with the defendant, courts won’t enforce an exculpatory  clause. Time will tell just how “business friendly” our Supreme Court wants our state to be.

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