October 12, 2012

The Missouri Supreme Court ponders the freedom of contract

By Deborah J. La Fetra Senior Attorney

Janet Chochorowski rented a garden tiller from Home Depot for $25.  Although she did not read the rental contract before she signed it, she signed at the bottom and also initialed acceptance of an optional provision that imposed a fee in exchange for Home Depot’s waiver of any claims for damages against her if she negligently damaged the equipment.   She was charged $2.50 for the damage waiver when she returned the undamaged tiller.  Purporting to represent a class of consumers, she sued Home Depot under the state’s consumer protection act, claiming that Home Depot misrepresented the waiver as mandatory and that the waiver itself was worthless.  The case is now before the Missouri Supreme Court.

In an amicus brief filed today, PLF urges the high court to uphold the contract.  PLF first argues that because Mrs. Chochorowski concedes that she signed a contract she did not read, the court has sufficient reason to dismiss her claims.  The Court of Appeals characterized this failure to perform the most basic duty of anyone who signs a contract as an understandable lack of sophistication, and then held that the courts must protect unsophisticated consumers from being held to their contractual choices.  PLF rejects this approach.  Mrs. Chochorowski was competent to enter into contractual relationships and all competent adults should enjoy the freedom to contract – to both bind the actions of others and be bound themselves.  Moreover, damage waivers are standard in both business contexts (as in the rental contract in this case) and in legal/judicial contexts (as in settlement of claims).  Such waivers are mutually beneficial and fair.

Many thanks to Jason R. Scheiderer, our local counsel in Kansas City, who helped us get this brief filed.

What to read next