Will Montana enforce this clause capping or excluding our liability to the other party?
Generally yes for ordinary negligence, but never for the three things the statute names. § 28-2-702, MCA declares “against the policy of the law” (the statute's own words; it does not say void, and the unenforceability consequence is the courts' (Zirkelbach, below)) “all contracts that have for their object, directly or indirectly, to exempt anyone from responsibility for the person's own fraud, for willful injury to the person or property of another, or for violation of law, whether willful or negligent”, subject to a single named exception at § 27-1-753, which is a real and usable safe harbour rather than a cross-reference. For a “sport or recreational opportunity”, § 27-1-753(3)(b) provides that the section “does not prohibit a written waiver or release entered into prior to engaging in a sport or recreational opportunity for damages or injuries resulting from conduct that constitutes ordinary negligence or for risks that are inherent in the sport or recreational opportunity”, and (3)(e) closes the loop: a waiver “executed in compliance with this section is not prohibited by or subject to the provisions of 28-2-702.” Compliance has a form. The waiver “must: (i) state known inherent risks of the sport or recreational opportunity; and (ii) contain the following statement in bold typeface: By signing this document you may be waiving your legal right to a jury trial to hold the provider legally responsible for any injuries or damages resulting from risks inherent in the sport or recreational opportunity or for any injuries or damages you may suffer due to the provider's ordinary negligence that are the result of the provider's failure to exercise reasonable care.” The statute prints that sentence verbatim, so a recreational provider's release should carry it word for word and in bold. Even then the statute does not make the release bulletproof: “[a]ny waiver or release for a sport or recreational opportunity may still be challenged on any legal grounds.” Montana courts enforce this exactly as written: Zirkelbach Construction, Inc. v. DOWL, LLC states flatly, “Contract terms that violate § 28-2-702, MCA, are unenforceable,” and identifies Miller v. Fallon Cnty. as the decision in which the Montana Supreme Court first interpreted § 28-2-702, MCA. Read together with § 28-2-701, MCA (a contract provision is unlawful if “(1) contrary to an express provision of law; (2) contrary to the policy of express law, though not expressly prohibited; or (3) otherwise contrary to good morals”), the statute's own text draws the line at the THREE named categories, fraud, willful injury, and violation of law (willful or negligent), not at negligence generally. A cap or exclusion aimed at ORDINARY negligence liability, outside those three categories, is not what § 28-2-702 reaches on its face.
The trap
“[v]iolation of law, whether willful or negligent” is the trap inside the trap: read literally, it reaches an exemption from responsibility for ANY legal violation caused merely negligently, not just intentional wrongdoing: a much broader reach than a simple no-waiver-of-gross-negligence rule of thumb would suggest, and this rule did not locate a Montana case narrowing that phrase. Indemnity clauses can be swept in too, but be careful which authority is doing the work, because neither of the two Montana opinions usually offered for the point actually holds it. In Langemo v. Montana Rail Link it was the DISTRICT COURT that “ruled that although § 28-2-702, MCA, precluded the Defendants from being indemnified for their own negligence, the indemnity agreement was enforceable as applied to the negligent acts or omissions of the Plaintiffs”, and the Supreme Court resolved the appeal on a different ground. In Safeco Insurance Co. of America v. Liss the Court went the other way outright, holding that “[t]he ‘public policy’ statute addressed by Safeco, § 28-2-702, MCA, which it claims forbids the contractual indemnification of an individual for illegal or criminal acts, has no application whatsoever to the case at bar.” So treat the interaction between § 28-2-702 and an indemnity clause as open on the law located here, with one district court reading in its favour and the Supreme Court declining to apply the section in the one case where a party pressed it. Do not assume a dollar CAP survives just because it stops short of a full exclusion: § 28-2-702 is written around exempting a party “from responsibility,” and no authority read for this rule establishes whether a partial cap (as opposed to a full exemption) gets different treatment for fraud, willful injury, or law-violation claims specifically.
8 authorities
- statuteMont. Code Ann. § 28-2-702enactment date not established
The words that state the rule
Except as provided in 27-1-753 , all contracts that have for their object, directly or indirectly, to exempt anyone from responsibility for the person's own fraud, for willful injury to the person or property of another, or for violation of law, whether willful or negligent, are against the policy of the law.
The words that state the rule
Contract terms that violate § 28-2-702, MCA, are unenforceable. Miller v. Fallon Cnty., 222 Mont. 214, 222, 721 P.2d 342, 347 (1986). Section 28-2-702, MCA, provides: All contracts that have for their object, directly or indirectly, to exempt anyone from responsibility for the person’s own fraud, for willful injury to the person or property of another, or for violation of law, whether willful or negligent, are against the policy of the law. ¶15 This Court first interpreted § 28-2-702, MCA, in Miller.
- statuteMont. Code Ann. § 28-2-701enactment date not established
The words that state the rule
That is not lawful which is: (1) contrary to an express provision of law; (2) contrary to the policy of express law, though not expressly prohibited; or (3) otherwise contrary to good morals.
The words that state the rule
The District Court ruled that although § 28-2-702, MCA, precluded the Defendants from being indemnified for their own negligence, the indemnity agreement was enforceable as applied to the negligent acts or omissions of the Plaintiffs and allowed the Defendants to enforce their claim for indemnity at the same time they claim the right to reduction in the Plaintiffs' award based on contributory negligence.
- caseSafeco Insurance Co. of America v. Liss (Mont., decided 28 December 2000)Safeco Insurance Co. of America v. LissMont.decided 2000
The words that state the rule
The “public policy” statute addressed by Safeco, § 28-2-702, MCA, which it claims forbids the contractual indemnification of an individual for illegal or criminal acts, has no application whatsoever to the case at bar.
- statuteMont. Code Ann. § 27-1-753enactment date not established
The words that state the rule
This section does not prohibit a written waiver or release entered into prior to engaging in a sport or recreational opportunity for damages or injuries resulting from conduct that constitutes ordinary negligence or for risks that are inherent in the sport or recreational opportunity.
- statuteMont. Code Ann. § 27-1-753enactment date not established
The words that state the rule
Any waiver or release for a sport or recreational opportunity must: (i) state known inherent risks of the sport or recreational opportunity; and (ii) contain the following statement in bold typeface: By signing this document you may be waiving your legal right to a jury trial to hold the provider legally responsible for any injuries or damages resulting from risks inherent in the sport or recreational opportunity or for any injuries or damages you may suffer due to the provider's ordinary negligence that are the result of the provider's failure to exercise reasonable care.
- statuteMont. Code Ann. § 27-1-753enactment date not established
The words that state the rule
Any waiver or release for a sport or recreational opportunity may still be challenged on any legal grounds. (e) Any waiver or release for a sport or recreational opportunity executed in compliance with this section is not prohibited by or subject to the provisions of 28-2-702 .
“Defective” means that reading found something to correct. What you are reading is the rule as it stands after that reading.