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Case Summary: Quilichini v Wilson’s Greenhouse & Garden Centre Ltd. and Velocity Raceway Ltd.
Defence + Indemnity

An electronic contract, executed electronically, including a liability exclusion form, was held to be effective to bar a defendant’s liability for a sports accident. 

Quilichini v. Wilson’s Greenhouse & Garden Centre Ltd. and Velocity Raceway Ltd., 2017 SKQB 10, per Scherman, J. 

Facts + Issues

The Plaintiff, Quilichini, sued for damages for personal injury suffered while driving a go-kart owned and operated by the Defendant, Velocity Raceway (Velocity), on Velocity’s premises. Notwithstanding a factual dispute as to the cause of the accident, Velocity applied for summary dismissal on the grounds that Quilichini had electronically completed an electronic contract, which contained a waiver form in the following terms before participating in the go-karting activity:

WAIVER & RELEASE

ALL PARTICIPANTS MUST READ CAREFULLY AND SIGN AT BOTTOM OF PAGE.

In consideration of Velocity Raceway Ltd. permitting me access to their premises and use of their equipment and facilities, I hereby acknowledge and agree as follows:

ASSUMPTION OF RISK I understand that this activity is dangerous and may become more hazardous or dangerous during the time I am on the premises of Velocity Raceway. … I am aware that the machines may travel at speeds of up to 80 kilometres per hour and that equipment failures or carelessness of other drivers are always possible. I understand the risk of injury from operating a go‑kart is significant, including the potential for serious bodily injury, paralysis and death; that I am aware of all the risks and hazards inherent with my operating a go‑kart at Velocity Raceway. It is entirely my choice to take part in this activity, and I therefore, accept and assume responsibility for any possible risk involved in my participating in this sport.

RELEASE I hereby acknowledge and forever discharge Velocity Raceway Ltd., its owners, employees, agents and affiliates, as well as their successors and assigns, from any and all claims, liabilities, demands, and/or actions for damages (including legal costs) arising in any way from my participation in go‑kart racing on their property. This release includes, inter alia, damages for personal injury, property damage and wrongful death and shall be binding on my heirs, successors and assigns.

All Velocity customers were required to first pass through a kiosk and execute an electronic contract with the release before being allowed to participate in go-karting:

[5] All persons wishing to participate in Velocity’s go‑kart races had to proceed through a kiosk system and execute the electronic waiver and release. Within this kiosk system, customers or participants:

  1. provide personal information, complete a membership application and pay for such membership;
  2. are photographed;
  3. go through a series of electronic pages on a computer screen and have to click “next” to move from one electronic page to the next; and
  4. agree to the terms of a waiver and release [e‑Waiver].

All participants are obligated to click the “I agree” icon or selection on the electronic waiver and release form presented to them on a screen before they are permitted to participate in a race.

On the day in issue, Quilichini had been processed through the kiosk system before engaging in go-karting. He had provided personal information, paid the fee, was photographed and had clicked the “I agree” icon.

Velocity argued that Quilichini’s electronic signature on the agreement was binding and that the e-Waiver provided a complete and absolute defence to his claim. Quilichini argued that a trial was necessary as to whether he actually executed the e-Waiver because the screen print of the e-Waiver form had signature spaces for both the participant and a staff member. He also argued that the exclusion of liability clause should be narrowly construed to be inapplicable because it did not expressly release Velocity from its own negligence.

HELD: For the Defendant; claim summarily dismissed. 

The Court held that the electronic contract formed by Quilichini having processed through Velocity’s kiosk system was binding, including with respect to the liability exclusion clause.

  1. The Court relied on Saskatchewan legislation, The Electronic Information and Documents Act, 2000, S.S. 2000, c. E-7.22, s. 18, which provided as follows:

Formation and operation of contracts

18(1) Unless the parties agree otherwise, an offer or the acceptance of an offer, or any other matter that is material to the formation or operation of a contract, may be expressed:

  1. by means of information or a document in an electronic form; or
     
  2. by an action in an electronic form, including touching or clicking on an appropriately designated icon or place on a computer screen or otherwise communicating electronically in a manner that is intended to express the offer, acceptance or other matter.

(2) A contract shall not be denied legal effect or enforceability solely by reason that information or a document in an electronic form was used in its formation. 

  1. The Court concluded that the legislation clearly allowed for binding contracts to be formed electronically, and applied to have that effect in this case:

[10] The legislation is clear. Agreement to contractual terms can be expressed by touching or clicking on an appropriately designated icon or place on a computer screen. The fact that the contract could have alternatively been executed by printing a hard copy and having a participant sign a hard copy form does not detract from the foregoing. The fact that there are optional ways to execute the contract does not lead to the conclusion that using only one of those options does not constitute agreement.

[11] As s. 18(1) of the Act provides, “Unless the parties otherwise agree ...”, the formation of a contract may be expressed in electronic form. There is no evidence here of the parties having agreed otherwise.

[12] I do not need a trial or to hear further evidence. I can make a fair and just determination of the issue of whether or not the plaintiff provided agreement in electronic form based on the affidavit evidence before me. I am satisfied from the uncontradicted evidence of the applicants that the plaintiff had an opportunity to read the waiver and release on screen while progressing through the kiosk system and that he, in fact, indicated his agreement to these terms in an electronic form.

[13] The fact that there was a hard copy alternative for a traditional signature does not alter the fact that the plaintiff gave an electronic agreement to the waiver and release. I am satisfied from the evidence that had he not done so, he would not have been permitted to participate in the go‑kart races in question.

  1. The Court summarized the principles relating to contractual limitations or waivers of liability:

[14] As stated in Fraser Jewellers (1982) Ltd. v Dominion Electric Protection Co. (1997), 1997 CanLII 4452 (ON CA), 148 DLR (4th) 496 (Ont CA) [Fraser]:

[30] As a general proposition, in the absence of fraud or misrepresentation, a person is bound by an agreement to which he has put his signature whether he has read its contents or has chosen to leave them unread. Cheshire, Fifoot & Furmston’s Law of Contract, 13th ed. (Toronto: Butterworths, 1996) at p. 168. Failure to read a contract before signing it is not a legally acceptable basis for refusing to abide by it. A businessman executing an agreement on behalf of a company must be presumed to be aware of its terms and to have intended that the company would be bound by them. The fact that Mr. Gordon chose not to read the contract can place him in no better position than a person who has. Nor is that fact that the clause is in a standard pre‑printed form and was not a subject of negotiations sufficient in itself to vitiate the clause. L’Estrange v. F. Graucob Ltd., [1934] 2 K.B. 394 at 403; Craven v. Strand Holidays (Canada) Ltd. (1982), 1982 CanLII 1859 (ON CA), 40 O.R. (2d) 186 at 194, 142 D.L.R. (3d) 31 (C.A.).

[31] This is not a case in which the clause limiting liability was so obscured as to make it probable that it would escape attention. This contract was printed and contained on essentially one sheet of paper. The limitation provision was highlighted in bold block letters. The language is clear and unambiguous. There was no need to resort to a magnifying glass to see it or a dictionary to understand it. Nothing was done to mislead a reader. Had Mr. Gordon perused the contract, he would have been aware of the limitation. The fact that he did not is irrelevant to the question of the fairness or conscionability of the contract.

[15] While Fraser was a decision dealing with a businessman signing a contract for commercial services, that principle has consistently been applied to contracting parties generally. See CED (online), Contracts “Formation of Contract – Offer and Acceptance” (II.6) at paras 91‑94 (WL) (9 January 2017), and in particular those cases listed under footnote 10 dealing with releases signed by participants in activities sometimes classified as dangerous.

[16] Karroll v Silver Star Mountain Resorts Ltd. (1988), 1988 CanLII 3094 (BC SC), 33 BCLR (2d) 160 (BCSC), sets out the test to be applied in determining whether a waiver or release from liability is enforceable. Chief Justice McLachlin (as she was then) ruled, at page 164, that the applicable legal principles are as follows:

The key, in my opinion, is recognition of the limited applicability of the rule that a party proffering for signature an exclusion of liability must take reasonable steps to bring it to the other party’s attention. It is not a general principle of contract law establishing requirements which must be met in each case. Rather, it is a limited principle, applicable only in special circumstances.

One must begin from the proposition set out in L’Estrange v. F. Graucob, supra, at pp. 406‑407, that “where a party has signed a written agreement it is immaterial to the question of his liability under it that he has not read it and does not know its contents”. ...

  1. Scherman, J. concluded that Velocity’s kiosk process involved reasonable measures to ensure that the waiver was brought to the attention of go-karting participants and was thus binding on Quilichini:

[17] The evidence here satisfies me that Velocity took reasonable measures to ensure that its customers received notice of the waiver and release provisions. Their kiosk system was designed so as to ensure the waiver and release page was presented to its customers and customers had to indicate acceptance before they could participate. The plaintiff’s evidence does not challenge the evidence of the defendants in this respect. Further, the activity involved was of a nature where it was normal for participants to expect to have to sign a waiver and release. The plaintiff would have understood that if he did not sign a release, he did not get to participate. He had freedom to choose.

[18] The plaintiff had a full opportunity to read the waiver and release and that there was nothing obscure in the presentation of waiver and release or the choice whether to accept or not. The plaintiff does not suggest in his reply affidavit that he did not have an opportunity to read the waiver and release nor that he did not know what he was agreeing to when he clicked his agreement.

The Court concluded that the language of the e-Waiver covered Velocity’s own negligence so as to provide a complete defence, even though it did not expressly purport to exclude such negligence.

  1. The Court passed on the principle of interpretation which provides that exclusion of liability clauses are to be strictly construed:

[20] In Bank of British Columbia Pension Plan v Kaiser, 2000 BCCA 291 (CanLII), 137 BCAC 37, the court, dealing with the interpretation of exclusion of liability clauses in contracts, said:

[17] Chitty on Contracts sums up the relevant case law with respect to the interpretation of a discharge of a contract or release as follows (pp. 1074‑5):

  1. No particular form of words is necessary to constitute a valid release. Any words which show an evident intention to renounce a claim or discharge the obligation are sufficient.
     
  2. The normal rules relating to the construction of a written contract also apply to a release, and so, a release in general terms is to be construed according to the particular purpose for which it was made.
     
  3. The court will construe a release which is general in its terms in the light of the circumstances existing at the time of its execution and with reference to its context and recitals in order to give effect to the intention of the party by whom it was executed.
     
  4. In particular, it will not be construed as applying to facts of which the party making the release had no knowledge at the time of its execution or to objects which must then have been outside his contemplation.
     
  5. The construction of any individual release will necessarily depend upon its particular wording and phraseology.

[21] While various courts have said that a rule of strict construction applies to exclusion of liability clauses, that proposition must not turn strict construction into strained construction. In Hunter Engineering Co. v Syncrude Canada Ltd., 1989 CanLII 129 (SCC), [1989] 1 SCR 426, the court said there is nothing inherently unreasonable about exclusion clauses and they should be applied unless there is compelling reason not to give effect to the agreement of the parties. At page 462, it stated:

… If on its true construction the contract excludes liability for the kind of breach that occurred, the party in breach will generally be saved from liability. Only where the contract is unconscionable, as might arise from situations of unequal bargaining power between the parties should the courts interfere with agreements the parties have freely concluded. …

[22] In Tercon Contracting Ltd. v British Columbia, 2010 SCC 4 (CanLII), [2010] 1 SCR 69 [Tercon], a case involving the unique considerations of contract tendering, the Court held (summarized in the headnote (QL) to the decision) that:

… With respect to the appropriate framework of analysis the doctrine of fundamental breach should be “laid to rest”. The following analysis should be applied when a plaintiff seeks to escape the effect of an exclusion clause or other contractual terms to which it had previously agreed. The first issue is whether, as a matter of interpretation, the exclusion clause even applies to the circumstances established in evidence. This will depend on the court’s interpretation of the intention of the parties as expressed in the contract. If the exclusion clause applies, the second issue is whether the exclusion clause was unconscionable and thus invalid at the time the contract was made. If the exclusion clause is held to be valid at the time of contract formation and applicable to the facts of the case, a third enquiry may be raised as to whether the court should nevertheless refuse to enforce the exclusion clause because of an overriding public policy. The burden of persuasion lies on the party seeking to avoid enforcement of the clause to demonstrate an abuse of the freedom of contract that outweighs the very strong public interest in their enforcement. Conduct approaching serious criminality or egregious fraud are but examples of well‑accepted considerations of public policy that are substantially incontestable and may override the public policy of freedom to contract and disable the defendant from relying upon the exclusion clause. …

  1. The Court accepted a three-stage analysis for interpreting liability exclusion forms as set out in Isildar v Kanata Diving Supply, 2008 CanLII 29598 (Ont Sup Ct):

[24] In a detailed judgment of over 700 paragraphs, Roccamo J. held that a three‑stage analysis was required to determine whether a waiver of liability in such circumstances was valid and enforceable. The elements of his analysis are as follows:

  1. Is the release valid in the sense that the plaintiff knew what he was signing? Alternatively, if the circumstances are such that a reasonable person would know that a party signing a document did not intend to agree to the liability release it contains, did the party presenting the document take reasonable steps to bring it to the attention of the signator?
     
  2. What is the scope of the release and is it worded broadly enough to cover the conduct of the defendants?
     
  3. Should the release not be enforced because it is unconscionable?
  1. The Court applied these principles to conclude that the scope of Velocity’s e-Waiver covered their own negligence and thus provided a complete defence:

[30] The language of the “Assumption of Risk” portion of the subject e‑Waiver is in plain English and expressly makes the points that:

  1. the activity is dangerous; and
     
  2. equipment failures are always possible.

It continues with the participants stating they understand the risks and that it is entirely their choice to participate in the activity and that they accept and assume responsibility for “any possible risk involved ….”

[31] The language of the “Release” portion of the e‑Waiver is similarly plain English and expressly provides a discharge “from any and all claims, liabilities, demands and/or actions for damages (including legal costs) arising in any way from my participation in go‑kart racing ....”

[32] As stated in Tercon, the first issue is whether, as a matter of interpretation, the exclusion clause even applies to the circumstances established in evidence. This will depend on the court’s interpretation of the intention of the parties as expressed in the contract. There can be no question but that the plaintiff understood that the assumption of risk and waiver of claims set out in the e‑Waiver applied to his participation in the go‑kart races. His acceptance was required for him to participate. The choice for him could not have been clearer.

[33] In my opinion, there can be no question but that when the plaintiff clicked “I agree”, he was intending to accept and assume responsibility for any possible risk involved and knew he was agreeing to discharge or release the defendants from all claims or liabilities arising, in any way, from his participation. The words “all claims, liabilities, demands and/or actions for damages (including legal costs) arising in any way from my participation in go‑kart racing” mean what they say and include claims arising from negligence. This language is at least as encompassing as words such as “howsoever arising” or “from any cause whatsoever” as used in Clarke or Simpson.

[34] I am of the opinion that while the e‑Waiver does not include the word negligence, it was clear the intent of the document was to release the defendant Velocity from liability of all claims or liabilities arising from his participation which includes claims that may be based on negligence of the defendants and should have reasonably been so understood by the plaintiff. The affidavit evidence establishes that Velocity was the sole owner and operator of the go‑kart racing facility and that Wilson’s, while a related corporation, was in no way involved.

COMMENTARY

Alberta has similar legislation to Saskatchewan’s Electronic Information and Documents Act, s.18 which, in our opinion, would lead to the same result in Alberta in conjunction with the common law cited in this case. Alberta’s Electronic Transactions Act, R.S.A. 2000, c. E-5.5, ss. 27 – 29 provide as follows: 

Formation and operation of electronic contracts

27  Unless the parties otherwise agree, an offer, the acceptance of an offer or any other matter that is material to the formation or operation of a contract may be expressed 

  1. by means of information or a record in electronic form, or
     
  2. by an act that is intended to result in electronic communication, such as
  1. touching or clicking on an appropriate icon or other place on a computer screen, or
     
  2. speaking.

Involvement of electronic agents

28  A contract may be formed by the interaction of an electronic agent and a person or by the interaction of electronic agents.

Errors re transactions with electronic agents

29  An electronic transaction between a person and another person’s electronic agent has no legal effect if 

  1. the person makes a material error in the electronic information or an electronic record used in the transaction,
     
  2. the electronic agent does not give the person an opportunity to prevent or correct the error,
     
  3. on becoming aware of the error, the person promptly notifies the other person, and
     
  4. in a case where consideration is received as a result of the error, the person 
  1. returns or destroys the consideration in accordance with the other person’s instructions or, if there are no instructions, deals with the consideration in a reasonable manner, and
     
  2. does not benefit materially by receiving the consideration.