Society has gone from risk-averse to risk-intolerant. It is hard to participate in any activity without being asked to read and sign some sort of release, exculpatory agreement, or liability waiver in advance. A key tool of risk management is the exculpatory agreement – a generic term which can refer to a provision in a contract, the back of a receipt or invoice, or simply by clicking “accept” in an online purchase. In most exculpatory agreements, one of two things is stipulated: (1) one party is relieved of any blame or liability arising from the other party’s wrongdoing with regard to a particular activity, and/or (2) one party (usually the one that drafted the agreement) is freed of all liability arising out of performance of that contract. Knowing how, when, and why such clauses are enforceable has become indispensable for today’s claims professionals and a necessity for knowing whether liability or subrogation claims can be pursued.
An exculpatory agreement is usually a provision contained in a contract between a service provider and a participant, relieving the service provider from any liability resulting from loss or damage sustained by the participant. The terms “waiver” and “release of liability” are usually used interchangeably. An example of an exculpatory clause is a dry cleaner’s receipt that includes a disclaimer purportedly relieving the dry cleaner from any liability for damage to the clothing during the dry-cleaning process. Disclaimers can appear as warning signs posted on playgrounds, sports arenas, constructions sites or other areas involving risk of physical injury (“enter at your own risk” or “use at your own risk”). It is common to see signs like the following in places of business: “Park at your own risk!”; “Swim at your own risk!”; “Enter at your own risk!”; or “The occupier is not liable for any item damaged or stolen from this property however caused!” They can appear as part of the packaging or advertising for consumer products. They can also be found as a “license” allowing a person to be on business premises or to use certain property, subject to limitations. Sometimes they take the form of “click-wrap” or “shrink-wrap” agreements – the fine print you see, among other things, when you click through terms and conditions in accessing an online service or as part of the installation of a piece of software. A typical waiver of liability form may read as follows:
I expressly, willing, and voluntarily assume full responsibility for all risks of any and every kind involved with or arising from my participation in hot air balloon activities with Company whether during flight preparation, take-off, flight, landing, travel to or from the take-off or landing areas, or otherwise. Without limiting the generality of the foregoing, I hereby irrevocably release Company, its employees, agents, representatives, contractors, subcontractors, successors, heirs, assigns, affiliates, and legal representatives (the “Released Parties”) from, and hold them harmless for, all claims, rights, demands or causes of action whether known or unknown, suspected or unsuspected, arising out of the ballooning activities….
Whether and to what extent exculpatory agreements and pre-injury waivers are effective against legal liability is a confusing subject that is complicated by 50 different bodies of state law. An exculpatory clause may be invalidated by courts if it is found to be unreasonable in any way. These risk management tools come in all shapes, sizes, and types. They include liability waivers, releases of liability, assumption of risk agreements, pre-injury releases, disclaimers of liability, sign postings, etc. Most people are unaware of what rights, if any, they are giving up or waiving, when they sign such exculpatory agreements. For many years, many professionals labored under the misconception that waivers are not worth the paper they are written on. Over time, this erroneous notion was replaced by the equally-erroneous belief that waivers can offer total liability protection for all facility and service providers under all circumstances. Neither belief is correct. Insurance and subrogation professionals must become familiar with the legal and binding effect of such exculpatory agreements to evaluate both liability claims and subrogation potential.
Over the last century, each state has developed its own case decisions and legislation about the enforcement of exculpatory provisions in contracts. Some states, such as Wisconsin, heavily disfavor their use and invalidate them if they are presented on a “take-it or leave-it” basis, with no opportunity to bargain. For example, in Atkins v. Swimwest Family Fitness Center, 691 S.W.2d 334 (Wis. 2005), the Wisconsin Supreme Court held that a guest registration and waiver form signed by a woman who drowned in a lap pool was an invalid exculpatory provision and against public policy, because it was overly broad and all-inclusive. The Court held that (1) the term “fault” did not make clear that the guest was releasing others from intentional, as well as negligent, acts, (2) the form served two purposes – guest registration and waiver of liability for “fault”, and (3) the guest did not have the opportunity to bargain – she either signed or she couldn’t swim. Other states invalidate them if they are overly broad and all-inclusive. Still others find a variety of public policy reasons for striking them down and/or place significant restrictions on their use.
Other states, like Ohio, have looked to the complexity of the language within the document to determine if an “ordinarily prudent and knowledgeable individual would have understood the provision as a release from liability for negligence.” Hall v. Woodland Lake Leisure Resort Club, 1998 WL 729197 (Ohio App. 1998). California courts have identified six criteria established to identify the kind of agreement in which an exculpatory clause is invalid as contrary to public policy:
(1) It concerns a business of a type generally thought suitable for public regulation;
(2) The party seeking exculpation is engaged in performing a service of great importance to the public, which is often a matter of practical necessity for some member of the public;
(3) The party holds himself out as willing to perform this service for any member of the public who seeks it, or at least any member coming within certain established standards;
(4) As a result of the essential nature of the service, in the economic setting of the transaction, the party invoking exculpation possesses a decisive advantage of bargaining strength against any member of the public who seeks his services;
(5) In exercising a superior bargaining power, the party confronts the public with a standardized adhesion contract or exculpation, and makes no provision whereby a purchaser may pay additional fees and obtain protection against negligence; and
(6) As a result of the transaction, the person or property of the purchaser is placed under the control of the seller, subject to the risk of carelessness by the seller or his agents. Tunkl v. Regents of the University of California, 60 Cal.2d 92 (Cal. 1963).
To be enforceable, many states require waivers to be narrowly and clearly drafted to fully notify the parties of the significance of the document and inform them as to the specific nature of what is being waived. In some jurisdictions, the waiver must be a separate document with its own signature line, should not use excessive legal jargon, and should discuss only the risks associated with the activity, and the release from liability due to negligence. Some states even require that the party waiving rights must be provided with an opportunity to bargain over the terms of the waiver. The text of the waiver itself should provide for the opportunity to bargain or at a minimum demonstrate that the waiving party considered bargaining prior to executing the release.
Generally, even if the waiver is held valid, it will apply only to ordinary negligence. A majority of states hold that such agreements generally are void on the ground that public policy precludes enforcement of a release that would shelter aggravated misconduct or gross negligence. City of Santa Barbara v. Superior Court, 41 Cal.4th 747 (Cal. 2007). Some states, such as Connecticut, 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. Hanks v. Powder Ridge Restaurant Corp., et al., 885 A.2d 734 (Conn. 2005). In addition, some state statutes affect the viability of an exculpatory clause. In New York, any assumption of risk/waiver in connection to any pool, gymnasium, amusement park, or any other similar facility is deemed statutorily void as against public policy – most notably when the plaintiff pays a fee to use the facility. They cite N.Y. Gen. Oblig. § 5-326. New Jersey has held that a release signed by a decedent with the express purpose of barring his potential heirs from instituting a wrongful death action in the event of his death was void as against public policy because of its Wrongful Death Act.
Types of Exculpatory Agreements
As stated above, exculpatory agreements come in all shapes, sizes, and types.
LIABILITY WAIVER. A waiver is a contract between a service provider and a participant signed prior to participating in an activity. In it, the participant agrees 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. The agreement attempts to relieve the service 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 waiver often states that the participant agrees to “release, waive, discharge, hold harmless, defend, and indemnify [the gym] and its [staff] from any and all claims, actions, or losses for bodily injury, property damage, wrongful death, loss of services or otherwise” arising out of the participant’s use of the gym facilities and equipment. Please note that indemnity agreements are not covered by or discussed in this article.
ASSUMPTION OF RISK AGREEMENT. Assumption of risk refers to situations in which an individual acknowledges the risks associated with any activity but chooses to take part anyway. At common law, “assumption of the risk” is an affirmative defense where the defense claims that the plaintiff knowingly exposed himself to the hazards that caused injury or damages. It alleges that the risks assumed are not those created by the defendant’s negligence, but rather by the nature of the activity itself. The rationale is that some activities are inherently dangerous and imposing a duty to mitigate those inherent dangers could alter the nature of the activity or inhibit vigorous participation. To avoid this chilling effect, owners or occupiers of premises or businesses in which a plaintiff engages in these activities, have no duty to eliminate those risks.
In the Restatement (Second) of Torts, the discussion regarding express assumption of risk is explained is follows:
The risk of harm from the defendant’s conduct may be assumed by express agreement between the parties. Ordinarily such an agreement takes the form of a contract, which provides that the defendant is under no obligation to protect the plaintiff and shall not be liable to him for the consequences of conduct which would otherwise be tortious. Restatement (Second) of Torts § 496B.
An individual can assume the risks involved in an activity in one of two ways: (1) expressly, by signing an agreement, or (2) by his conduct. Express assumption of risk involves a written agreement in which an individual acknowledges the risk of injury or other damages and agrees to assume those risks. A “Waiver of Liability” usually includes language that the participant understands the risks inherent in certain activities and that participation in such activities could result in injury. The participant usually acknowledges that the risks and dangers may be caused by the negligence of the staff of the business, accidents, breaches of contract, or other causes, and that the participant assumes all risks and dangers, including the responsibility for any losses or damages, whether caused in whole or in part by the negligence or conduct of service provider. To prevail on an assumption of risk affirmative defense, the defendant must show the court that the plaintiff knew there was a risk of injury or other harm, and knowingly engaged in the activity which resulted in his injury or damages anyway.
PRE-INJURY RELEASE. A pre-injury release or waiver is a written document that a participant signs prior to 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. American Jurisprudence states that “[a] valid release continues to be a complete bar to recovery in negligence actions in every jurisdiction.” 30 Am. Jur. Proof of Facts 3d 161 § 3. What courts consider to be a “valid release”, however, varies from state to state. A properly-worded pre-injury release can be an effective way to limit liability. However, there are many ways injured parties can defeat a poorly-worded pre-injury release. States such as Texas require that for a pre-injury release to be effective, it must (a) meet the fair notice requirements, (b) constitute a meeting of the minds, and (c) be supported by valid consideration. Dresser Indus., Inc. v. Page Petroleum, Inc., 853 S.W.2d 505 (Tex. 1993).
INDEMNITY AGREEMENT. To “indemnify” means to reimburse another party for loss or damage suffered because of a third party’s or one’s own acts or omissions. It is a promise to reimburse another for such a loss 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. An agreement to indemnify is often coupled with a promise to “hold harmless” another party:
Seller shall hold harmless and indemnify Buyer against any losses, liabilities, and claims arising out of or relating to this transaction.
HOLD HARMLESS AGREEMENT. A hold harmless agreement is one in which the participant absolves the service provider from any responsibility for damage or other liability arising from a transaction or activity. Black’s Law Dictionary says that the two terms have the same meaning whereas Mellinkoff’s Dictionary of American Legal Usage says that one can also distinguish the two terms – that “hold harmless is understood to protect another against the risk of loss as well as actual loss” whereas indemnify can also mean “reimburse for any damage,” a narrower meaning than that of hold harmless. Technically, the former is defensive, while the latter is offensive. The participant agrees to “hold harmless” (i.e., indemnify) a service provider even before any injury or damage is sustained. A “hold harmless” agreement protects against losses and liabilities, while an indemnity agreement protects against losses alone. Indemnity agreements are much different than waivers of liability and releases and are not discussed at length in this article.
DISCLAIMER/SIGN POSTING. 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 (such as host/visitor, manufacturer/consumer, etc.). The disclaimer usually acts to relieve a party of liability in situations involving risk or uncertainty. A very common method of communicating this attempted limitation on liability is posting a sign, such as “Use or Enter at Your Own Risk.” The sign on the back of a tractor-trailer which reads: “Stay Back: Not Responsible for Broken Windshields” is not a contract that would prevent a motorist from presenting a claim for damages against a trucking company. At best an attorney for the trucking company would argue that the sign was a warning which creates some contributory negligence on the part of the damaged motorist. A sign which warns of dangers or conditions of real property won’t exonerate premises liability or a duty owed by a property owner, but it may serve to put an occupier on notice of a condition and will allow the owner to argue contributory negligence or “assumption of the risk.” In some states, a person who is found to have “assumed the risk” might not be able to recover at all. However, other states treat the assumption simply as a way to reduce, but not eliminate, the owner’s legal liability.
Signs which purport to limit liability for injuries or accidents simply because they are posted are found everywhere. Some signs serve a legitimate function, such as notifying people of “hidden” hazards such as wet floors, steps, or uneven surfaces. That’s why every time there is a spill in a store, out comes the “wet floor” sign.
While “wet floor” signs may fulfill a duty to warn others, other signs attempt to limit liability. A sign which reads “Not Responsible for Stolen Vehicles” is attempting to shirk a duty a valet service owes to its customers to safeguard and protect items left in their care and custody.
COVENANT NOT TO SUE. This agreement provides that the participant agrees or covenants 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.
TICKETS/RECEIPTS. An exclusion clause, waiver or disclaimer may appear on a document which does not appear to be a contract. These may be found on the back of tickets to a basketball game, amusement park, concert, etc. Exculpatory clauses are often found on the back of a ticket or a receipt that you have not signed. The theory is that the act of purchasing the ticket is all that is needed for an agreement to form between the parties in which one promises not to sue the other in the event of an injury. Disclaimers can often be seen where information, products, or services are supplied. The disclaimer and other terms and conditions should be available for viewing at the point in time that the contract is entered into, before the purchaser or user agreed to proceed. The effectiveness of such an exclusion clause is assessed by considering whether actual or constructive notice occurred prior to the contract forming. It is harder to prove notice was given in the case of unsigned disclaimers or disclaimers printed on receipts issued after payment. In such cases, a court considers whether a reasonable person would consider the receipt, voucher, or ticket to be part of the contract and know that they should read it. In some states, the courts hold that that the release on a ski ticket stating that the skier “assumes the inherent risks of skiing” does not clearly and unambiguously release the operator from liability for the operator’s negligence. Steele v. Mt. Hood Meadows Oregon, Ltd., 974 P.2d. 794 (Or. Ct. App. 1999). They are frequently held to the same standards as waivers and exculpatory clauses found in written and signed contracts. In Wisconsin, for example, the only issue is whether the language is against public policy. Yauger v. Skiing Enterprises, Inc., 557 N.W.2d 60 (Wis. 1996). Other states make their ultimate determination on the effectiveness of such “agreements” based on what constitutes the public interest after considering the totality of the circumstances of any given case. Wolf v. Ford, 644 A.2d 522 (Md. App. 1994).
CLICK-WRAP / SHRINK-WRAP. “Shrink-wrap” and “click-wrap” agreements are the fine print you see, among other things, when you click through terms and conditions in accessing an online service (e.g., in connection with a purchase or an online service) or as part of the installation of a piece of software. The term “shrink-wrap” comes from the packaging method of computer installation disks and associated documentation sealed by shrink-wrap cellophane. The purported end user license agreement was often itself packaged in shrink-wrap cellophane and placed on the outside of the package or included as the top most item in the package. Shrink-wrap agreements can take a variety of forms and are found in both software and hardware acquisitions. However, they all have a common structure: essentially non-negotiable terms and conditions that accompany the product. The terms are often used interchangeably. Although this article doesn’t deal with these types of agreements, courts have tended to uphold as enforceable “shrink-wrap” and “click-wrap” agreements, even if the consumer fails to read them. The terms and conditions found in shrink-wrap and click-wrap agreements vary greatly, but include such terms as warranty terms, licensing use restrictions, limitations on liability, indemnity, and arbitration and venue terms. These clandestine agreements may also be encountered as part of the documentation provided with new software or a hardware component. They may even be found, with some searching, in a file entitled “license.txt” or similar name on the installation CD on which a new piece of software is delivered. Businesses seldom read these terms in any detail, generally view them as non-negotiable, and accept them as a necessary evil.
Enforcement Generally
The enforcement of exculpatory clauses is very state-specific. Each state can be classified as to its enforcement of such waivers. Some are very lenient, others moderate, and many have very strict requirements. Three states disallow such waivers entirely. Because exculpatory clauses are widely disfavored, a majority of state courts strictly construe the terms and conditions against the party seeking to enforce them and require that the contract “clearly set out what negligent liability is to be avoided.” Ingersoll-Rand Co. v. El Dorado Chem. Co., 283 S.W.3d 191 (Ark. 2008). This generally means that the courts require the exculpatory clause to be clear and unambiguous. Any such release must clearly, explicitly, and comprehensibly set forth to an ordinary person untrained in the law the intent and effect of the document. Cohen v. Five Brooks Stable, 72 Cal. Rptr.3d 471 (Cal. App. 2008). Some courts require that the word “negligence” be specifically included and that the waiver explicitly state the type of negligence being waived to distinguish between losses resulting from inherent risks and those resulting from fault or wrongdoing. Slowe v. Pike Creek Court Club, Inc., 2008 WL 5115035 (Del. Super. 2008).
The most common reason waivers are not enforced is because they are poorly written. Courts in all states require that the language be clear and unambiguous. In addition, many states require specific language in order for the waiver to be enforceable. For instance, courts in New York and several 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.
Most states will not enforce waivers intended to protect the provider against liability for gross negligence, reckless conduct, willful/wanton conduct, or intentional acts. Ordinary negligence is the failure to take the prudence and 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. It is sometimes said that gross negligence includes a reckless disregard for the rights and welfare of others.
In some states a waiver signed by a 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, such a waiver has no effect on the right of the non-signing spouse to bring suit.
Some states, such as Arizona, have held that the validity of an express contractual assumption of risk is a question of fact for a jury, not a judge. Phelps v. Firebird Raceway, Inc., 111 P.3d 1003 (Ariz. 2005). States such as Virginia “universally prohibit” any “provision for release from liability for personal injury which may be caused by future acts of negligence” and only allow releases of liability for property damage. The Supreme Court of Virginia has clearly held that public policy forbids the enforcement of a release or waiver for personal injury caused by future acts of negligence. Johnson’s Adm’x v. Richmond and Danville R.R. Co., 11 S.E. 829 (Va. 1890). Louisiana has a statute that declares as null any clause that limits liability based on intentional fault or gross fault or for physical injury. Ostrowiecki v. Aggressor Fleet, Ltd., 965 So.2d 527 (La. App. 2007). Montana similarly prohibits exculpatory clauses that purport to release a party from negligence. In Montana, “it is statutorily prohibited for any contracts to have as their object, directly or indirectly, the exemption of anyone from responsibility for their own fraud, their willful injury to the person or property of another, or for their willful or negligent violation of the law.” Montana Code Ann. § 28-2-702.
In at least 46 states, a well-written, properly administered waiver, voluntarily and knowingly signed by an adult, can protect the drafter of the waiver from liability for injuries resulting from ordinary negligence. Not all waivers, however, are well-written and properly administered. Some states, such as Louisiana, Montana, and Virginia, simply refuse to enforce such exculpatory agreements. Twenty (20) states have very strict standards which must be adhered to for an exculpatory agreement to be effective. These include Alaska, Arizona, Arkansas, California, Connecticut, Delaware, Hawaii, Indiana, Kentucky, Maine, Mississippi, Missouri, Nevada, New Hampshire, New Jersey, New York, Pennsylvania, Utah, Vermont, and Wisconsin. Sixteen (16) states have more moderate standards in order for such an exculpatory clause to be valid. They include Colorado, District of Columbia, Florida, Idaho, Illinois, Iowa, Minnesota, New Mexico, North Carolina, Oklahoma, Oregon, South Carolina, South Dakota, Texas, Washington, and West Virginia. Ten (10) states have very lenient standards and tend to enforce sloppily-drafted exculpatory agreements. They include Alabama, Georgia, Kansas, Maryland, Massachusetts, Michigan, Nebraska, North Dakota, Ohio, and Tennessee. Rhode Island hasn’t clearly defined its requirements and is hard to classify.
Parental Waivers Signed on Behalf of Minors
An issue which is developing in many states is the restriction on enforcing waivers signed by minors or signed by the parents of minors (parental waivers). Until recent years, the general rule was that waivers signed by minors or waivers signed by the parents of minor children were not enforceable. In the past few years, courts in several states have begun to enforce parental waivers. Additionally, two states (Alaska and Colorado) have passed statutes enabling the enforcement of such agreements.
Application to Business Losses
Whether or not the same public policy concerns and applications which govern the efficacy of exculpatory clauses involving personal injury claims applies equally to the release of business losses in a contract between two commercial entities is also an area that varies from state to state. Although there is often a correlation between the two, the subject of exculpatory agreements between two commercial entities is not covered in this article. As an example of its treatment, however, in Discount Fabric House v. Wisconsin Telephone, Inc., 345 N.W.2d 417 (Wis. 1984), the plaintiff, a drapery business, sued the Wisconsin Telephone Company for omitting the plaintiff’s trade name from an advertisement in the Yellow Pages. The court noted that the nature of the telephone company’s business gave it a “decisive advantage of bargaining strength.” Therefore, the exculpatory clause was held invalid.
Posted Warning and “Not Responsible for Injuries” Signs
Many businesses are choosing to display warning signs about potentially dangerous conditions on a property or inside a building. A “Do Not Enter” sign may transform social guests or invitees into trespassers, altering the duty owed to the injured party. But, it doesn’t necessarily relieve the premises owner of premises liability. A “Beware of Dog” sign may actually be used against the property owner, who apparently is aware that people must be “warned” about the dangerous propensity of the dog. At the same time, it may allow the dog owner to argue that the person assumed the risk of a dangerous dog after reading the sign. A “Caution: Wet Floor” sign may serve as notice to invitees and social guests of a hazardous condition. However, they open a new area of litigation regarding their visibility and specificity. A tractor-trailer may have a sign on the back of the trailer which reads, “Warning: Stay Back 200 Feet. Not Responsible for Broken Windshields.” However, these are often of little legal effect. In Florida, for example, F.S.A. § 316.520 states that a vehicle may not be driven or moved on any highway unless the vehicle is so constructed or loaded as to prevent any of its load from dropping, shifting, leaking, blowing, or otherwise escaping therefrom, except that sand may be dropped only for the purpose of securing traction or water or other substance may be sprinkled on a roadway in cleaning or maintaining the roadway. It is the duty of every owner and driver, severally, of any vehicle hauling, upon any public road or highway open to the public, dirt, sand, lime rock, gravel, silica, or other similar aggregate or trash, garbage, any inanimate object or objects, or any similar material that could fall or blow from such vehicle, to prevent such materials from falling, blowing, or in any way escaping from such vehicle. No sign will erase the legal duty which the statute creates. A sign in a hotel lobby that states “This hotel is not responsible for any stolen or lost items” may be enough for hotels to avoid liability in some states. However, other states hold that a simple sign without any other precautions is not enough.
Drafting Effective Exculpatory Agreements
It is not possible to draft a release/waiver that will withstand judicial scrutiny in every state given the variations in standards for each state. Moreover, because state statutes can affect whether an exculpatory clause will be enforced (for example, whether it will be effective against one’s heirs/assigns), a “one size fits all” approach is simply not feasible. It is still possible to create enforceable exculpatory agreements; there remain numerous traps for non-vigilant drafters. Over the last 25 years, the courts have repeatedly said that waivers of liability clauses are and will continue to be looked at with disfavor. Waivers of liability (i.e., an exculpatory clause) are not invalid per se. Rather, provisions of any such waiver must be closely scrutinized and strictly construed against the party seeking to rely on it.
Drafters of exculpatory agreements are not always given clear guidance as to what is and what isn’t acceptable. The Wisconsin Supreme Court has now considered exculpatory agreements in six cases in the past 25 years, and each time has found the agreement as drafted to be unenforceable. It isn’t so much that lawyers and businesses that draft such agreements are ignoring what the Court is telling them, as much as it is that the Supreme Court has not formulated a clear, uniform test for these agreements. Until the Court announces such a test, lawyers who draft exculpatory agreements must carefully apply what the Court has said so far and give thorough consideration to the circumstances surrounding the signing of the agreement.
Despite their unpredictability, exculpatory agreements are the best risk management tool available to businesses and service providers. Put succinctly, they can’t hurt. Frequently, exculpatory agreements are accompanied by such contractual risk management tools as indemnification agreements, covenants not to sue, a severability clause, a venue and jurisdiction clause, a mediation/arbitration provision, and an assumption of risk statement. Interpreting the interplay between all these usually requires engaging qualified counsel. A chart found HERE provides a brief and general summary of how exculpatory clauses are treated in all 50 states. Exculpatory agreements most commonly fail because they are poorly drafted. For a more detailed and case-specific evaluation of the effect an exculpatory agreement may have on a claim or matter, contact Lee Wickert at leewickert@mwl-law.com or submit the matter to MWL for review and handling HERE.
