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A Detailed Legal Analysis of Bilbo's Contract in The Hobbit

contract

In one of the more comical scenes in The Hobbit, the dwarves present Bilbo with an employment contract. Like Neatorama employment contacts, Bilbo's alarmingly waives the dwarves of liability for lacerations, eviscerations and incinerations incurred during employment. Bilbo nonetheless signs it.

Did he get a good deal? Attorney James Daily studied the contract and thinks that it was well-crafted--at least from the dwarves' point of view. For example, Thorin has substantial leeway to alter the terms:

These two clauses also pose something of a contradiction.  On the one hand we see the first of many liability waivers:

[Thorin has] a right to alter the course of the journey at his so choosing, without prior notification and/or liability for accident or injury incurred.” But on the other hand we see this explicit obligation of care: “[the Adventure] shall proceed in a timely manner and with all due care and consideration.

Ordinarily “due care and consideration” signifies taking on liability for negligence, so this conflicts with the earlier liability waiver. Perhaps the two can be reconciled by the phrase “as seen fit by said Thorin Oakenshield and companions.” Thorin and Co. could always claim that the amount of care and consideration they saw fit was extremely minimal, though that runs the risk of making the clause meaningless, which courts usually don’t like to do.  ”As a general proposition, whenever possible, the law favors reconciliation of clauses within a contract which appear contradictory.” City of Columbia v. Paul N. Howard Co., 707 F.2d 338, 340 (8th Cir. 1983). Taken together with the numerous other waivers and disclaimers, I think a court would probably conclude that Thorin & Co. were not taking on any particular duty of care. ”A writing is interpreted as a whole.”  Restatement (Second) of Contracts § 202(2).

Waivers or disclaimers of liability are an important part of many contracts. These can include waivers of a product warranty (seen all the time in software license agreements) and waivers for liability due to negligence (often required before doing something dangerous like skydiving). But there are limits to liability waivers. While a party to a contract can ordinarily waive liability for negligence (although not in every jurisdiction), one cannot waive liability for gross negligence, recklessness, or intentional misconduct.  So the numerous (and sweeping!) waivers and disclaimers may not be as effective as they appear at first glance.

You can read the rest of his analysis at the link. You may already be familiar with Daily's comedy. He's a contributor to Law and the Multiverse, a blog which examines the legal ramifications of actions taken by superheroes.

Link -via Glenn Reynolds | Image: Warner Bros.


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