Waiver of Liability

In our modern risk-averse society, a liability waiver can help to protect you or your business against potential liability for exposure claims. A waiver is simply a voluntary relinquishment or abandonment of a legal right. Waiver, Black’s Law Dictionary (11th ed. 2019). A liability waiver, sometimes also called an exculpatory agreement, is a written contract between two or more parties in which one party (generally the customer) acknowledges the risks of participating in an activity or of accepting the services of another party (generally the provider).

The terms "waiver" and "release of liability" are usually used interchangeably.

• Waiver of Liability
• Liability Waiver
• Exculpatory Agreement
• Exculpatory Clause

The use of a waiver of liability not only discourages many potential claimants from commencing litigation, but also causes lawsuits that are filed to be dismissed without payment, thereby lowering insurance costs and other expenses businesses might otherwise incur. Case law makes it clear, however, that the terms of an exculpatory agreement will be closely scrutinized by the courts. Courts will most likely enforce exculpatory agreements in personal injury claims arising from negligence if certain guidelines are met, thus demonstrating that it is not possible to eliminate all types of liability. Exculpatory clauses stand at the crossroads of two competing principles. Those competing principles are freedom to contract and taking responsibility for one’s own negligent acts.

An exculpatory clause may be invalidated by courts if it is found to be unreasonable in any way. Also the clarity of the wording is critical. Ambiguity in the agreement very often determines if the waiver of liability is enforceable. To be enforced, the clause must be written in clear, easy to understand language. Ambiguity will exist if the exculpatory clause is susceptible to two or more reasonable interpretations. If the exculpatory clause is not susceptible to more than one interpretation, it will typically be enforced as it is written.

A majority of states hold that waivers of liability generally are void on the ground that public policy precludes enforcement of a release that would shelter aggravated misconduct or gross negligence. Some states do not recognize degrees of negligence and, consequently, do not recognize the tort of gross negligence as a separate basis of liability. Such courts have nevertheless limited the application of the releases to situations in which considerations relating to public policy and good conscience are not implicated.

There are variations of agreement types:

1. Liability Waiver - a contract between a service provider and a participant signed prior to participating in an activity with the participant agreeing to waive liability against the provider for any fault or liability for injuries resulting from the ordinary negligence of the provider, its employees, or its agents.
2. Assumption of Risk Agreement - this is where an individual knows an activity has risk but chooses to do it anyway. Here the assumption of risk is an affirmative defense where the defense claims that the plaintiff knowingly exposed himself to the hazards that caused injury or damages.
3. Pre-Injury Release - here the participant signs an agreement before engaging in an activity, which purports to release the service provider from claims an individual may bring as a result of the provider’s negligence. This release of future liability is a contractual arrangement where one party surrenders legal rights or obligations.
4. Indemnity Agreement - This is an agreement where there is a promise to reimburse another for loss or damage suffered because of a third party’s or one’s own acts or omissions and to give security against such a loss. It is a promise to do something in the future, should injury or damage result from an activity.
5. Hold Harmless Agreement - The participant agrees to absolve the service provider from any responsibility for damage or other liability arising from a transaction or activity.
6. Disclaimer Posted - A disclaimer is any statement or posting that is used to specify or limit the scope of obligations and rights that are enforceable in a legally recognized relationship to relieve a party of liability in situations involving risk or uncertainty.
7. Covenant Not to Sue - The participant agrees not to sue the service provider for any loss, damage, or injury to their person or property which may occur from any cause whatsoever during the event or service provided.
8. Fine Print - Exculpatory clauses are often found on the back of a ticket or a receipt that you have not signed when going to a sporting event or shopping at a local merchant. There are agreements in the fine print you see, among other things, when you click through terms and conditions in accessing an online service in addition to things that you find in print. When in print, you make no action to agree other than to use or purchase. Online, you often have to take the action of clicking an indicator which assumes it is you that are making the agreement. These examples are part of a large body of passive forms of risk-averse legal liability related exculpatory agreements that tend to be more limited in scope and enforcement.