Determination of the Validity of Exclusion Clauses in Institutional Care Service Contracts

Abstract

In order to exclude or reduce their liability for future damages to elderly residents, elderly care institutions usually prepare elderly care service contracts in advance and include relevant form clauses in them. In current judicial practice, there are controversies over the validity of exclusion clauses in elderly care service contracts, with some courts holding that the exclusion clauses are unreasonable and exclude their own liability, that they are invalid for failure to take reasonable instructions, and that they are invalid because the nature of the exclusion clause causes physical damage to the other party. Some courts have also held that exclusion clauses which are not based on damage caused by the institution are valid. In this regard, it is important to clarify the order of application of the norms for determining the validity of exclusion clauses in institutional pension service contracts: first, to examine whether the exclusion clause is included in the pension service contract; second, to examine whether the exclusion clause is an exclusion of the pension institution’s responsibility for causing damage to the elderly due to its own causes; and finally, to examine whether the pension institution has “unreasonably” exempted or reduced its own liability.