People and companies are often full of doubts about the enforceability of liability waivers? Are they really as beneficial as many claims potray? Do liability waivers really work in real-case scenarios?
In this article, American Courthouse will help you to cut the clutter and go to the bottom of it. But, to understand why these concerns arise and how to deal with them, we need to understand what a liability waiver is.
What is a Liability Waiver?
A liability waiver is a contract that a service provider and a consumer or a participant of that service sign. By signing the contract, the consumer or the participant agrees to absolve the provider of any fault or liability for injuries that occur due to the ordinary negligence of the provider, its employees, or its agents.
The inherently risky activities, such as skiing, running, riding in a race, playing sports league, or joining a gym, involve the mandatory signing of a liability waiver. If an accident happens while performing any of these activities, the waiver protects the institution that is offering the service from any liability. These liabilities may include claims for injuries, lawsuits, etc.
Participation in adventure activities, such as scuba diving, horseback riding, rafting, rock climbing, is not possible these days without signing a liability waiver first. Participants are often denied membership in sports clubs if they do not agree to sign on the liability waiver. With so much importance imparted upon them, the question that both parties are often asking the legal experts is, do they really work? Are they enforceable by law? Well, let’s dig deeper to answer these doubts.
Do Liability Waiver Work?
Let’s begin with an example. In the case of Vinikoor v. Pedal Pennsylvania Inc. in the state of Pennsylvania, the plaintiff Paul Vinikoor filed a lawsuit against Pedal Pennsylvania Inc. when he got injured during a bike tour organized by the company.
Vinikoor v. Pedal Pennsylvania Inc.
The charges brought against Pedal by Mr. Vinikoor were very specific. He claimed that Pedal did not inform or warn him about the grooves in the roadway that caused the accident. The checklist of the potential dangers supplied to Mr. Vinkoor by Pedal before he ventured out on the tour did not mention the grooves.
Pedal, as the defendant, sought a dismissal of the case. They presented the liability waiver signed by Mr. Vinkoor where he had absolved Pedal of all possible charges in case of any injury, death, illness, or property damages that might occur on the tour. The signed statement clearly stated that Mr. Vinkoor was signing the document knowing the risks of a bike tour well. Types of risks included fatalities, bodily injuries, property damages, etc. By signing the waiver, Mr. Vinkoor also absolved Pedal of any probable charges relating to property damages or injuries that might happen due to bad weather conditions.
The judge ruled in favor of Pedal Pennsylvania Inc. and dismissed Mr. Vinkoor’s claims. The basic lesson to be learned from this instance is that a liability waiver works just fine but its wording should be well-thought-out. However, there are some other rules and norms that a liability waiver must follow to be robust enough to stand its ground in the court. This case was a perfect example that one can provide to the question – Do liability waivers work?
The Liability Waiver Must-Haves
- The liability waiver should be worded clearly. It should unambiguously state that it is relieving the company of all its legal liabilities for any type of potential mishaps that may happen in its jurisdiction. Firms often hold themselves back while drafting these waivers. They think that stating too clearly about the unconditional absolution would make their consumers more suspicious about the chances of injuries, fatalities, or damages. Such guarded drafting may end up creating loopholes against the company in the court of law.
- The waiver should be prominently visible. It should not be one of the several parts of a long contract.
- The waiver must have the signature of the person who has pressed charges.
From a user’s end, it is extremely vital to read the entire text carefully. Often participants, in the excitement of the upcoming activity, don’t read it attentively enough. A thorough reading helps to prejudge the types of risks that the participant may face.
Let’s say that both parties make the best of their efforts to formulate a robust contract. Even then, the judiciary will decide whether they will uphold the waiver in the courts of law.
Liability Waiver and The Legal Fraternity
Sometimes even the best of the lawyers are suspicious of the enforceability of their client’s waiver. It is because of the wide variance among states. Some of the states have very lenient requirements, whereas some of them have moderate to strict requirements.
Below, we have listed the states of America according to their likelihood of enforcing these waivers.
- Not Enforced: Louisiana, Montana, Virginia
- Strict Standards: Alaska, Arkansas, Connecticut, Hawaii, Kentucky, Missouri, Nevada, New Jersey, Philadelphia, Vermont, Arizona, California, Delaware, Indiana, Maine, Mississippi, New Hampshire, New York, Utah, and Wisconsin.
- Moderate Standards: Colorado, Florida, Illinois, Minnesota, North Carolina, Oregon, South Dakota, Washington, Washington D.C., Idaho, Iowa, New Mexico, Oklahoma, South Carolina, Texas, West Virginia.
- Lenient Standards: Alaska, Kansas, Massachusetts, Nebraska, Ohio, Georgia, Maryland, Michigan, North Dakota, Tennessee.
- Insufficient Information to Classify: Puerto Rico, Rhodes Island.
For a court to uphold the waiver, the document should fulfill some conditions. These conditions are:
- The document should not violate any law or public policy of that state.
- The drafting of the waiver, apart from being clear and unambiguous, should follow the contract law of the state in which it is drafted.
- The injury or damage should be arising out of the risks stated in the contract or the defendant company’s negligence.
Although, there are instances of courts discussing “known and unknown risks” and the inherent risks of an activity. However, in states like Wisconsin, which follows strict standards of enforcement, there are instances of courts turning down waivers for them not being in the public interest. The courts observe that the boilerplate, standard waivers are sweepingly all-inclusive and absolve the company or the organization of everything. The courts in the state found that organizations are not even willing to take responsibility for simple negligence on their part.
These state-wise considerations often make waivers valid in one state, invalid in another. As can be seen from the points above, the waivers stand null and void in the states of Virginia, Montana, and Louisiana. But waivers that have the capability of guarding a company’s interests in lenient-standards states like Massachusetts or Nebraska may fail to work in a strict-standards state like Connecticut or Kentucky.
Other Considerations
Now, consider a waiver is drafted well and the case is sub-judice in a state which allows liability waivers. Even in such a favorable scenario, liability waivers may fail to guard the company against paying injury claims. Although clear and unambiguous drafting is a must, the court considers several other aspects before announcing the judgment.
- The courts look into the intensity of the injury. Were the injuries extreme, nearly fatal, or not that serious? A careful examination of the damage and injury often impacts the judgment more than the quality of drafting the waiver.
- The court also considers whether the contract specifically skewed towards one particular party’s favor. They look into whether the bargaining power was unequal.
- The court also scrutinizes whether the injury or damage is something that was anticipated by the agreement.
- They also look into whether the risk was inherent to the activity or a result of gross negligence of the company.
The quality of the waiver in terms of its clarity, transparency, and visibility are important. But the abovementioned factors also play a crucial role in deciding whether the waiver will work or not. Therefore, whether a liability waiver will be held up in the court of law gets decided by the language of the contract, the foresight of the organization, and the nature of the accident.