The ABCs of Liability Waivers
By Dr. Doyice J. Cotton
There are many misconceptions regarding liability waivers and releases. For many years, the major misconception was that "waivers are not worth the paper they are written on." Unfortunately, as this belief fades out, it is often replaced by the erroneous belief that waivers can offer total liability protection for all facility and service providers under all circumstances. So, let's take some time to clarify what waivers are and what they can and cannot do, and provide the basic information necessary to make the best use of this valuable risk-management tool.
A waiver is a contract between a service provider and a participant signed prior to participation by which the participant agrees to absolve the provider of any fault or liability for injuries resulting from the ordinary negligence of the provider, its employees or its agents. The agreement relieves the provider of liability for injuries resulting from mistakes, errors or faults of the provider and, in effect, relieves the provider of the duty to use ordinary care in providing for the participant.
The terms "waiver" and "release of liability" are usually used interchangeably. Other protective legal documents include the disclaimer, the indemnification agreement, the covenant not to sue and the informed consent agreement. These terms are often wrongly used synonymously with waiver, but they actually have different functions and effects. While they can be valuable to professionals, space constraints prevent a further examination of these concepts here.
One reason so many people are confused about whether waivers are effective is because waiver law is based on state law. Thus, the answer to the question "Do waivers work?" depends on which state you are in. Based on a study of state statutes and court decisions in more than 900 sport- or recreation-related waiver cases, each state can be classified as to its stance toward waivers. Some have very lenient requirements for enforcement, others moderate, and many have very strict requirements. Three states disallow such waivers entirely. (See Table 1.)
In at least 46 states, a well-written, properly administered waiver, voluntarily signed by an adult, can protect service providers from liability for injuries resulting from the ordinary negligence of the provider, its employees and its agents. Note, however, that not all waivers protect in the lenient states and not all waivers fail in the strict states.
Waivers do have limitations that can adversely affect their effectiveness.
Some of the more important limitations include:
Language Requirements: The most common reason waivers fail is because they are poorly written. Courts in all states require that the waiver language be clear and unambiguous. In addition, many states require specific language for the waiver to be enforceable. For instance, New York courts (and the courts in a number of other states) require that the waiver include language specifying the "negligence" of the provider. Failure to use the word "negligence" in those states causes an otherwise-enforceable waiver to fail.
Gross Negligence: In most states, courts will not enforce waivers intended to protect the provider against liability for gross negligence, reckless conduct, willful/wanton conduct or intentional acts. Where ordinary negligence is defined as the failure to take the care that a reasonable, prudent professional would take under the circumstances, gross negligence is an extreme form of negligence in which the party fails to take the care that even a careless person would take under the circumstances.
Non-Signing Spouses: In some states a waiver signed by one spouse protects the provider from litigation by the non-signing spouse in the event of injury or death of the signing spouse. In other states, a waiver has no effect on the right of the non-signing spouse to bring suit. In this case, the provider will find itself lacking the expected protection of the waiver.
Minor Clients: A significant limitation that is very important to many service providers is the restriction on enforcing waivers signed by minor clients or signed by the parents of minor clients (parental waivers). Until recent years, the general rule was that neither waivers signed by minors nor parental waivers were enforceable. In the past few years, courts in a number of states have begun to enforce parental waivers. Additionally, two states (Alaska and Colorado) have passed statutes enabling the enforcement of such agreements. Table 2 shows the current status of parental waivers in each state.
In spite of their limitations, waivers are still the best single risk-management tool available to service providers, other than the prevention of the injury. Here are some suggestions to maximize waiver effectiveness and protection:
Use waivers in all states for two reasons: First, waiver law in any state is always subject to change. Even though waivers were not enforced in the past, a new court or a new set of circumstances can result in their enforcement. Second, well-written waivers will include a discussion of the inherent risks of the activity, so even if the waiver is not enforced, the court may use the waiver as evidence that the signer knew and assumed the inherent risks.
Use parental waivers with minor clients in all states. There is no downside—if the waiver is not enforced, you are no worse off. In the past 15 years, courts or legislatures in 10 states have either enforced such waivers for the first time or passed legislation to that effect.
Use the stand-alone format. This simply means the waiver should be a document of its own. It should not be contained in a contract such as a membership agreement, in an application or in an agreement signed by a group of people. Although waivers in other formats are generally enforceable, they are not as strong, and courts have expressed a preference for the stand-alone waiver agreement.
Use the new approach to waivers—the participant agreement. The participant agreement has two major advantages. First, it provides more protection by including such protective tools as an indemnification agreement, a covenant not to sue, a severability clause, a venue and jurisdiction clause, a mediation/arbitration provision, and an in-depth assumption of risk section. The second major advantage is that it is written with a less threatening, less one-sided approach, which serves to benefit both the provider and the signer. It strives to build rapport between the two and delivers the message that the provider cares about the safety and well-being of the signer. (More complete information on this new approach can be found in the 5th edition of "Waivers & Releases of Liability." See author information for more details.)
Finally, it is important to understand that all waivers are not created equal. Many service providers acquire their waivers from a book or from a friend who is also in the business. It is vital to understand that a waiver that worked in one state will not necessarily work in your state. In fact, a waiver that worked in your state will not necessarily work for your business. Your waiver should be written specifically for your business, considering the services you have to offer, the way you do business and the quirks of your business operation. One other caution: Not all attorneys have experience and know-how regarding waivers, and not all good waivers are written by attorneys. Be sure to select an attorney who is familiar with waiver law and familiar with your type of business. A more economical approach is to write your own waiver and then have a knowledgeable attorney examine and improve it. Money spent learning about waivers and in acquiring a good waiver for your operation is money well spent.
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