Minnesota Will Let You Contract Away Almost Anything — Except the Things That Let a Court Find Out What Happened

Transactional lawyers spend their careers on what a contract can say. Minnesota has spent the last several decades quietly building a body of law about what it cannot.

Those provisions are scattered — construction in chapter 337, LLCs in chapter 322C, secured transactions in Article 9, data breach in chapter 325E, evictions in chapter 504B. Nobody reads them together, because no practice area touches more than two of them.

Read together, they are not random. Minnesota is remarkably permissive about letting sophisticated parties allocate risk, money, and even fiduciary duty. What it refuses to let them do is close off the mechanisms by which a court, or the other party, could later find out what actually happened.

The non-waivable core in Minnesota is access, information, and forum. Almost everything else is negotiable.

Exhibit A: the LLC act says duties may not be eliminated, then says how to eliminate them

Minn. Stat. § 322C.0110, subd. 3 reads like a hard floor. An operating agreement “may not”:

(4) subject to subdivisions 4 to 7, eliminate the duty of loyalty, the duty of care, or any other fiduciary duty;

(5) subject to subdivisions 4 to 7, eliminate the contractual obligation of good faith and fair dealing under section 322C.0409, subdivision 4;

Then read the words “subject to subdivisions 4 to 7,” and go there. Subdivision 4:

If not manifestly unreasonable, and without limiting the terms that may be included in an operating agreement, the operating agreement may: (1) restrict or eliminate the duty [to account for property, profit, or benefit, including appropriation of a company opportunity; to refrain from adverse dealing; and to refrain from competing before dissolution]; (2) identify specific types or categories of activities that do not violate the duty of loyalty; (3) alter the duty of care, except to authorize intentional misconduct or knowing violation of law; (4) alter any other fiduciary duty, including eliminating particular aspects of that duty; and (5) prescribe the standards by which to measure the performance of the contractual obligation of good faith and fair dealing under section 322C.0409, subdivision 4.

So the prohibition is nearly swallowed by the permission. Loyalty can be restricted or eliminated component by component. Care can be altered. Other fiduciary duties can be altered or partially eliminated. Only two things are absolute: nothing may be manifestly unreasonable, and nothing may authorize intentional misconduct or a knowing violation of law.

Now look at what subdivision 3 does not qualify. Three restrictions carry no cross-reference to subdivision 4, and they are the ones that matter when a member is being frozen out. An operating agreement may not:

(6) unreasonably restrict the duties and rights stated in section 322C.0410 [information rights];

(7) vary the power of a court to decree dissolution in the circumstances specified in section 322C.0701, subdivision 1, clauses (4) and (5) [including the oppression ground];

(9) unreasonably restrict the right of a member to maintain an action under sections 322C.0901 to 322C.0906 [direct and derivative actions].

Information. The courthouse. The right to sue. You may bargain away your partner’s duty not to compete with you. You may not bargain away your ability to see the books, ask a court to dissolve the company, or bring the action. We covered what that means in a live dispute here and the inspection right itself here.

Exhibit B: Article 9 draws the line at timing, not at fairness

Minnesota’s secured transactions law contains one of the longest non-waiver lists in the code. Minn. Stat. § 336.9-602:

Except as otherwise provided in section 336.9-624, to the extent that they give rights to a debtor or obligor and impose duties on a secured party, the debtor or obligor may not waive or vary the rules stated in the following listed sections …

The list runs thirteen items. Among them: requests for an accounting and for a list of collateral (§ 336.9-210); accounting for and payment of surplus proceeds; the duty of a secured party taking possession without judicial process “to do so without breach of the peace”; the disposition rules at §§ 336.9-610(b), 336.9-611, 336.9-613, and 336.9-614; the deficiency calculation where the buyer is the secured party, a related person, or a secondary obligor; the explanation of how a surplus or deficiency was calculated; and redemption.

Notice the character of that list. It is almost entirely notice, accounting, explanation, and the manner of self-help — the mechanisms that let a debtor reconstruct what the secured party did. The substantive bargain is untouched.

And the exception proves the rule, because it is a timing rule. Minn. Stat. § 336.9-624:

(a) A debtor or secondary obligor may waive the right to notification of disposition of collateral under section 336.9-611 only by an agreement to that effect entered into and signed after default.

Same for waiving mandatory disposition, and same for redemption — with redemption waiver barred outright “[e]xcept in a consumer goods transaction.”

Minnesota is not saying these rights are too important to give up. It is saying you may not give them up before you know what you are giving up. A waiver signed at closing, when default is hypothetical, is void. A waiver signed after default, when the debtor can see exactly what is at stake, is valid. That is a coherent theory of consent, and it runs through most of the chapter — see our Article 9 deficiency guide.

One clause in the same section is not a timing rule, and it is worth naming rather than glossing. The redemption waiver in § 336.9-624(c) is available “[e]xcept in a consumer goods transaction” — meaning that for consumer goods, redemption cannot be waived at any time, before or after default, however well the debtor understands the trade. That is a substantive judgment about a class of transaction, not a rule about when consent is informed. The timing principle explains most of Article 9’s waiver architecture. It does not explain that one.

Exhibit C: construction, where Minnesota voids five clauses outright

Chapter 337 is the bluntest instrument in this survey.

• Minn. Stat. § 337.02 — an indemnification agreement in a building and construction contract “is unenforceable except to the extent that” the injury is attributable to the promisor’s own negligent or otherwise wrongful act or omission, “including breach of a specific contractual duty,” or where the indemnity concerns strict liability under environmental laws.
• Minn. Stat. § 337.05, subd. 1(b) — a provision requiring a party to insure another party “for the negligence or intentional acts or omissions” of that other party “is against public policy and is void and unenforceable.”
• Minn. Stat. § 337.10, subd. 1 — provisions making a contract to be performed in Minnesota “subject to the laws of another state or requiring that any litigation, arbitration, or other dispute resolution process on the contract occur in another state are void and unenforceable.”
• Minn. Stat. § 337.10, subd. 2 — provisions requiring a contractor, subcontractor, or material supplier “to waive the right to a mechanics lien or to a claim against a payment bond before the person has been paid” are void — though “not … as to any third party who detrimentally relies upon the waiver.”

Three of those four are access provisions. Forum. Lien rights. Bond claims. The fourth — indemnity and additional-insured coverage — is a substantive risk allocation, and it is the one place in this survey where Minnesota does police substance directly. Full treatment here.

Exhibit D: the short, absolute ones

Data breach. Minn. Stat. § 325E.61, subd. 3, headed “Waiver prohibited,” is one sentence: “Any waiver of the provisions of this section and section 13.055, subdivision 6, is contrary to public policy and is void and unenforceable.” Note the cross-reference — the prohibition reaches the Government Data Practices Act’s breach provision as well, which matters to any private company holding data under a government contract. See our breach notification guide.

Eviction. Minn. Stat. § 504B.365, subd. 5, addressing unlawful removal of a tenant’s property: “This section may not be waived or modified by lease or other agreement.”

Construction misclassification. Minn. Stat. § 181.723, subd. 7(c) makes it a violation to condition payment on an employee agreeing “to being classified, represented, or treated as an independent contractor or form a business entity,” or to “require or request an individual who is an employee pursuant to this section to enter into any agreement or complete any document that misclassifies, misrepresents, or treats the individual as an independent contractor” — with each agreement or document a separate violation. See our misclassification guide.

Non-competes. Minn. Stat. § 181.988 makes a covenant not to compete “void and unenforceable” for agreements entered into on or after July 1, 2023 — and subd. 3 separately forbids requiring an employee who primarily resides and works in Minnesota to litigate elsewhere or be deprived of Minnesota’s substantive protection as to a controversy arising here. See our non-compete guide.

Where Minnesota does permit the waiver — and what it asks in exchange

The counter-examples are as instructive as the prohibitions, because each attaches a condition.

The pattern is consistent. Where Minnesota permits waiver, it conditions it on the waiving party actually being in a position to evaluate the trade — after default, after payment, after full disclosure, by disinterested persons, and never so far as to be manifestly unreasonable.

What to do with this

If you are drafting:

1. Stop treating “the parties may agree otherwise” as the whole answer. Chapter 322C’s freedom is real, but subd. 3(6), (7), and (9) are not qualified by it, and a clause reaching them is void no matter how carefully drafted.
2. Sequence your waivers. Article 9’s rule is about timing. A notice waiver at closing is worthless; the same waiver after default is enforceable. Build your default-workout documents accordingly.
3. Use the ratification machinery instead of the elimination machinery. Section 322C.0110, subd. 5 lets an operating agreement specify how an otherwise-disloyal transaction may be authorized or ratified by disinterested and independent persons after full disclosure. That is a durable path to the same commercial result, and it survives scrutiny that a blanket elimination will not.
4. Delete unenforceable clauses from Minnesota forms. An out-of-state forum clause in a Minnesota construction contract, or an unconditional pre-payment lien waiver, does not merely fail — it invites a threshold fight you will lose and signals that the rest of the form was not reviewed for Minnesota.
5. Assume “manifestly unreasonable” will be litigated. It is the only general fairness backstop in chapter 322C’s freedom provisions, and it has no bright line.

If you are on the receiving end of a form contract:

• Check the access provisions first, not the risk allocation. A clause restricting your information rights, your ability to bring an action, or your forum is the clause most likely to be void.
• Check when you signed it. A waiver of a right you had not yet acquired, and could not yet value, is exactly what several of these statutes are designed to defeat.
• Do not assume a signed document ended the question. In more than one of these chapters, the signature is the thing the statute is aimed at.

The observation

There are two ways a legislature can protect people from bad contracts. It can police the terms — deciding that some bargains are too one-sided to enforce. Or it can police the machinery — leaving the bargain alone while guaranteeing that a party can find out what happened, get an accounting, and reach a courthouse.

Minnesota has mostly chosen the second, and it is the more restrained choice. It does not require the Legislature to decide what a fair indemnity or a fair valuation formula looks like. It requires only that nobody be able to contract out of the process that would reveal an unfair one.

Which is why the clauses most likely to be void in a Minnesota contract are rarely the ones that look aggressive. They are the quiet ones: the forum clause, the information limitation, the advance waiver, the covenant not to bring an action. Those read as boilerplate. In Minnesota they are the part of the document most likely not to exist.

Madgett Law, LLC reviews and drafts Minnesota commercial agreements with these limits in view — operating agreements, construction contracts, security agreements, and the workout documents that follow — and litigates the enforceability questions when a clause is asserted. If a provision is being enforced against you, the first question is whether Minnesota permits it at all. Send us a message or call 612-470-6529.

Sources: Minn. Stat. § 322C.0110 (operating agreement; scope, function, and limitations — subd. 1, matters the operating agreement governs; subd. 2, default rules; subd. 3, the eleven restrictions, including clause (4) on fiduciary duties subject to subdivisions 4 to 7, clause (6) on § 322C.0410 information rights, clause (7) on the court’s power to decree dissolution under § 322C.0701, subd. 1, clauses (4) and (5), and clause (9) on actions under §§ 322C.0901 to 322C.0906; subd. 4, provisions particularly but not exclusively authorized if not manifestly unreasonable, including alteration of the duty of care “except to authorize intentional misconduct or knowing violation of law”; subd. 5, authorization or ratification by disinterested and independent persons after full disclosure; subd. 6, elimination of duty where responsibility is eliminated); Minn. Stat. § 322C.0409 (standards of conduct for members, managers, and governors); Minn. Stat. § 336.9-602 (waiver and variance of rights and duties; the enumerated non-waivable provisions) and § 336.9-624 (waiver of disposition notification, mandatory disposition, and redemption only by agreement entered into and signed after default, and the consumer-goods limitation on redemption waiver); Minn. Stat. § 337.02 (unenforceability of certain indemnification agreements); § 337.05, subd. 1(b) (insurance for another party’s negligence or intentional acts void as against public policy); § 337.10, subds. 1 and 2 (out-of-state law and forum provisions void; pre-payment lien and bond-claim waivers void, subject to third-party detrimental reliance); Minn. Stat. § 325E.61, subd. 3 (waiver prohibited; any waiver of that section and of § 13.055, subd. 6, contrary to public policy and void and unenforceable); Minn. Stat. § 504B.365, subd. 5 (penalty; waiver not allowed); Minn. Stat. § 181.723, subd. 7(c) (prohibited activities related to independent contractor status; each agreement or document a separate violation); Minn. Stat. § 181.988 (covenants not to compete void and unenforceable, and the subd. 3 choice-of-law and venue provisions); Minn. Stat. § 510.05 (limitations on the homestead exemption, including a charge under § 481.13 pursuant to a valid waiver) (Minnesota Office of the Revisor of Statutes). This survey is not exhaustive; Minnesota contains anti-waiver provisions beyond those discussed here. Whether a particular clause is enforceable depends on the contract and the transaction. This article is general legal information about Minnesota law, not legal advice, and reading it does not create an attorney–client relationship. No outcome is promised or implied.