Will an Iowa court enforce this clause capping or excluding our liability for our own negligence?
As a general matter Iowa enforces them. In Huber v. Hovey the Supreme Court said that although track owners and operators have a duty to provide safe premises, "we have repeatedly held that contracts exempting a party from its own negligence are enforceable, and are not contrary to public policy", citing Bashford v. Slater, where an injured racetrack flagman's release was enforceable. Two statutory controls sit beside that rule where UCC article 2 applies. A court that finds, as a matter of law, that a contract or any clause of it was unconscionable at the time it was made may refuse to enforce the contract, enforce the remainder without the clause, or so limit the clause's application as to avoid any unconscionable result (Iowa Code § 554.2302(1)). And consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable; limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable, but limitation of damages where the loss is commercial is not (§ 554.2719(3)).
The trap
Huber was a spectator's signed release at a racetrack, and the opinion read here states the enforceability rule without laying down how conspicuously or how explicitly such a clause must refer to negligence, so treat that part of the drafting standard as unsettled by this rule rather than satisfied. Two things it does settle, and both are limits on the clause rather than support for it. The release binds only the person who signed: "One spouse’s signature on a release is not imputed to the other spouse any more than is one spouse’s negligent act", so the Court reversed summary judgment for ALL defendants on the non-signing spouse's consortium claim, holding that "a separate tort is committed when an actor’s conduct deprives a spouse of the right to consortium." And it protects only the parties it names: summary judgment for the track's insurance broker was reversed because "The form contains a lengthy list of released parties" and nowhere mentions insurers or insurance brokers. Huber is AFFIRMED IN PART, REVERSED IN PART AND REMANDED, not a clean win for the release. The statutory controls are narrower than they look: §§ 554.2302 and 554.2719 are article 2 sections, and whether article 2 governs a mixed goods-and-services deal is not answered here. One statute that is often assumed to reach this clause does not, on its words: Iowa Code § 537A.5(2) voids a construction contract's promise to indemnify, hold harmless or defend ANOTHER party against that other party's own negligence, which is a promise to answer for the counterparty's fault, and nothing read extends it to a clause capping or excluding the promisor's own liability to its counterparty. Where Iowa's construction anti-indemnity section § 537A.5 is in play, four relationships sit outside it altogether: “This section does not apply to the indemnification of a surety by a principal on any surety bond, an insurer’s obligation to its insureds under any insurance policy or agreement, a borrower’s obligations to its lender, or any obligation of strict liability otherwise imposed by law.” So a surety bond, an insurer's duty to its own insured, a borrower's obligations to its lender and a strict-liability obligation imposed by law are untouched by that section, whatever a construction contract says about indemnity. Two Huber points a drafter should not miss. The signer's own inattention is no answer: "It is well settled that failure to read a contract before signing it will not invalidate the contract." and "Absent fraud or mistake, ignorance of a written contract’s contents will not negate its effect." And the release held because of what it named: "It clearly identifies the track’s owner, operator, and lessee, as well as race participants, as releasees. The release covers personal injuries, including injuries caused by the releasee’s own negligence." What can still defeat such a clause is factual rather than verbal, and the Court left that door open: "Absent any proof the risk was unusual or exceptional, Dale must be bound by his release."
14 authorities
The words that state the rule
Although track owners and operators have a duty to provide safe premises, see Gibson v. Shelby County Fair Ass’n, 241 Iowa 1349, 1352 , 44 N.W.2d 362, 364 (1950), we have repeatedly held that contracts exempting a party from its own negligence are enforceable, and are not contrary to public policy. See, e.g., Bashford v. Slater, 250 Iowa 857, 865 , 96 N.W.2d 904, 909 (1959) (injured racetrack flagman’s release enforceable).
- statuteIowa Code § 554.2302enactment date not established
The words that state the rule
If the court as a matter of law finds the contract or any clause of the contract to have been unconscionable at the time it was made the court may refuse to enforce the contract, or it may enforce the remainder of the contract without the unconscionable clause, or it may so limit the application of any unconscionable clause as to avoid any unconscionable result.
- statuteIowa Code § 554.2719enactment date not established
The words that state the rule
Consequential damages may be limited or excluded unless the limitation or exclusion is unconscionable. Limitation of consequential damages for injury to the person in the case of consumer goods is prima facie unconscionable but limitation of damages where the loss is commercial is not.
- statuteIowa Code § 537A.5enactment date not established
The words that state the rule
Except as excluded under subsection 3, a provision in a construction contract that requires one party to the construction contract to indemnify, hold harmless, or defend any other party to the construction contract, including the indemnitee’s employees, consultants, agents, or others for whom the indemnitee is responsible, against liability, claims, damages, losses, or expenses, including attorney fees, to the extent caused by or resulting from the negligent act or omission of the indemnitee or of the indemnitee’s employees, consultants, agents, or others for whom the indemnitee is responsible, is void and unenforceable as contrary to public policy.
- statuteIowa Code § 537A.5enactment date not established
The words that state the rule
This section does not apply to the indemnification of a surety by a principal on any surety bond, an insurer’s obligation to its insureds under any insurance policy or agreement, a borrower’s obligations to its lender, or any obligation of strict liability otherwise imposed by law.
The words that state the rule
The district court granted all defendants summary judgment based on a release Dale signed.
The words that state the rule
The words “I have read this release” were printed in red above each signature line.
The words that state the rule
These same principles of autonomy apply to releases signed by only one spouse. One spouse’s signature on a release is not imputed to the other spouse any more than is one spouse’s negligent act.
The words that state the rule
Thus, a separate tort is committed when an actor’s conduct deprives a spouse of the right to consortium. We therefore reverse the district court’s grant of summary judgment to all defendants on Karen’s claim.
The words that state the rule
The form contains a lengthy list of released parties, but it nowhere men *58 tions either insurers or insurance brokers.
The words that state the rule
We affirm the district court’s grant of summary judgment in favor of Hovey, Nordic, and the fairgrounds board and agricultural association on Dale’s claim, but reverse summary judgment for these defendants on Karen’s con *59 sortium claim.
The words that state the rule
Dale also seeks to avoid the effect of the release on the ground he did not read it. It is well settled that failure to read a contract before signing it will not invalidate the contract. Small v. Ogden, 259 Iowa 1126, 1132 , 147 N.W.2d 18, 22 (1966). Absent fraud or mistake, ignorance of a written contract’s contents will not negate its effect.
The words that state the rule
By its terms, however, the release applies to anyone who, like Dale, enters a restricted area. It makes no distinction between spectators and participants. It clearly identifies the track’s owner, operator, and lessee, as well as race participants, as releasees. The release covers personal injuries, including injuries caused by the releasee’s own negligence.
The words that state the rule
Absent any proof the risk was unusual or exceptional, Dale must be bound by his release.
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.