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Liability Waivers vs. Actual Liability

September 18, 2011

Liability Waivers vs. Actual Liability

Liability Waivers Vs. Actual Liability

Over the past couple of weeks I have been participating in a variety of activities, such as horseback riding and flight lessons, and have noticed they all have on thing in common: waivers of liability.

A waiver of liability is a form used by organizations/individuals as a means of protecting themselves from being held legally accountable for any injuries resulting from the use of their product, equipment, or services. An assumption of risk is the premise under which a waiver of liability functions. Therefore, an individual is aware of the potential risks involved in doing or not doing something and forfeits their right to take legal action to recover damages in the event they are injured; hence, the individual is assuming the risk. However, it is important to know that there are situations in which a waiver of liability is not enforceable.

Is the Liability Waiver Enforceable?

The enforceability of a waiver can first be determined by analyzing the language of the waiver itself. A reasonable and adequate warning must be provided that clearly and unambiguously expresses the intent of the parties. Any ambiguity pertaining to the extent of the release is construed against the drafter. Moreover, the waiver must be properly worded in compliance with the law and be fashioned so that an ordinary person, untrained in the law, could understand. This requires a high degree of clarity and specificity in the wording of the document. In addition, the location and size of the exculpatory language is crucial to the enforcement of a waiver of liability. A separately titled subsection that is easily noticeable and printed in 10-point font or greater is generally accepted as valid.

Another reason a waiver of liability may be unenforceable is if an organization or individual attempts to contract away a statutory duty. This duty is partly derived from a state’s public policy and varies from one jurisdiction to the next. Likewise, some states prohibit the use of waivers in conjunction with certain sports or activities. Vermont, for example, has a public policy exception for ski areas and other recreational facilities that are open for public use. In these states, providers of the select services are statutorily prohibited from avoiding liability for ordinary negligence.

Furthermore, some state laws bar the use of waivers for personal injury entirely. Under Tennessee law, one may contract away liability for negligence, however, two exceptions exist: (1) a party cannot contract away liability if the duty is a public one, and (2) one may not contract away liability for willful or gross negligence.

Does Negligence Factor Into Liability?

Gross negligence is distinguished as an extreme form of negligence in which one fails to use the care that even a careless person would use. Reckless misconduct is regarded as a more severe form of gross negligence, while willful and wanton misconduct is considered the most severe form of negligence. Waivers of liability are not intended to guard companies that are grossly negligent in maintaining their property or equipment, or are reckless in how their property or equipment is used.

Therefore, when I took my flight lesson, the company was required to maintain their equipment to ensure the planes are suitable to be flown. If I had been injured during the lesson as a result of negligence in maintaining the plane, the company may have still been held liable for my injury, despite my signing a waiver of liability.

How Does Bargaining Power Come Into Play?

Moreover, many states hold that waivers between parties of unequal bargaining power are unenforceable. Such an instance would be an adhesion contract, where a take it or leave it situation is created. This is often viewed as restricting one party’s opportunity to bargain and is unenforceable if the contract is oppressive or involves an essential service.

However, recreational providers are generally not viewed as having greater bargaining power as the participant is free to not sign the waiver and take their business elsewhere or not participate in the activity. Employer-employee contracts, however, are seen as existing between parties of unequal bargaining power as the livelihood of the employee is involved. Although, employment waivers have been enforced in instances where the work was part time or for a very small salary.

In conclusion, it is important to always be aware of what you are signing and the laws of the state that you are in. While some states prohibit the use of waivers, there are many that do not. In fact, some states have even held that waivers promote public policy by making providers comfortable in allowing public participation in recreational activities. However, if you do find yourself in a situation where a waiver of liability is unenforceable, it is a sure way to guarantee that tortfeasors are not allowed to avoid responsibility and you are properly compensated for any injury.

Waiver of Liability
Signing Away All Your Rights? Not Always…
Posted By: Eston Whiteside

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