The Lawletter Vol 37 No 7
Businesses often require a child's parent to sign a release before the child may participate in an activity that the business conducts or sponsors. In some cases the release includes an indemnification provision that requires the parent to indemnify the business from any claim brought on behalf of the child. In a case of first impression, the Maryland Court of Special Appeals has ruled that such agreements are invalid on public policy grounds.
In Rosen v. BJ's Wholesale Club, Inc., No. 2861 Sept. Term 2009, 2012 WL 3764517 (Md. Ct. Spec. App. Aug. 30, 2012) (not yet released for publication), a membership warehouse club provided a play center for its customers' children, but a parent was required to sign a release and indemnity agreement in advance. While the plaintiff mother was shopping, her child was injured while playing on an apparatus known as "Harry the Hippo." The key issue in the case was whether the release agreement was enforceable to relieve the defendant of liability.
Lacking on-point authority in Maryland, the Rosen court turned to case law from other states for guidance. In other states, the majority rule is that public policy precludes enforcement of such agreements, for several reasons. First, a statute or rule may require court approval in order to release a child's claim, although the Rosen court noted that such is not the rule in Maryland. Second, such agreements may remove an important incentive to act with reasonable care, and they are often imposed without any bargaining or opportunity to buy insurance. Third, commercial businesses are in a better position than children are to eliminate hazards and protect themselves. Finally, a state may act as parens patriae to protect children from harm.The Rosen court adopted the majority view, stating that its holding would provide incentives for commercial enterprises to take reasonable precautions in operating and maintaining their facilities, and to obtain adequate insurance to cover risks arising from the negligence of agents and employees. With regard to the agreement's indemnification provisions, the court ruled that they were an invalid attempt to circumvent the public policy that invalidated the release language. The court expressly declined to consider whether its ruling might apply when nonprofit or governmental entities are involved.