Waivers: A Basic Legal Overview
A waiver is a legal term that refers to an individual purposefully and voluntarily relinquishing a known right or entitlement. In many cases, a waiver is given in written form, as part of a legal document such as a contract. However, you may also encounter waivers in verbal communications. The purpose of a waiver is to discharge obligations that would otherwise have been binding. For example, if an individual signs a waiver of liability, they are giving up the right to take future legal action against a person or company for any liability associated with whatever the waiver refers to. A party may ask another party to sign a waiver to eliminate the possibility of a future court action . When it comes to signing a waiver, you’re essentially agreeing that you are completely aware of the potential risks associated with what you’re waiving and that you agree not to pursue legal action against that person or entity. Therefore, waivers serve to protect the entity asking an individual to sign it. Waivers are most commonly used in employment contracts, liability waivers, parental consent forms, and non-disclosure agreements. Why would a company or organization request that an individual sign an event waiver? For example, if a business offers extreme activities such as skydiving, amusement rides, or other high-risk adventures, they may require participants to sign an activity waiver. This relieves them of some of the risk liability associated with the activity.
Key Components of an Enforceable Waiver
For a waiver to be legally binding and potentially enforceable in court, it must contain certain key elements that ensure its effectiveness. The language contained in the waiver must be clear and unambiguous, as this is critical for setting forth with precision the scope of the release. To that end, the language should specifically refer to the type of harm or injuries the participant will be releasing. If the waiver fails to do this, it may not have the requisite effect. For example, if the language only generally refers to bodily injuries instead of describing them more precisely, but also describes additional stated harms unrelated to injuries, the waiver may be deemed ineffective as to bodily injuries, even though it purports to include them. A waiver lacking clarity as to what is being released may allow a plaintiff to argue that the waiver is void.
Similarly, if the waiver language is contrary to what parties to the activity would expect, it may be found to be invalid. Since waivers can be counterintuitive at times, courts are willing to consider what a party would expect when they agreed to the waiver, and whether the scope of the release is consistent with their expectations. If it is not, the waiver may be found to be invalid. This is particularly true if it can be shown that the party seeking to enforce the waiver had a greater familiarity with the waiver and relevant law than the other party, because in such a circumstance, courts might find the waiver is not really mutual or exchanged. Accordingly, a waiver executed for a benefit that is exceptionally disproportionate to the harm, or in the face of exceptional risks or dangers, could potentially be deemed lacking in consideration, and thus unenforceable.
The waiver also must be entered into voluntarily. If a participant is coerced into signing a waiver or fails to review and understand it before signing, then it is less likely to be found to be enforceable. Additionally, if the terms or scope of the waiver are very different from those within the context of the agreement (such as in the example above), the waiver may be found to not be really mutual or exchanged. Courts may view a waiver as being invalid where participants unknowingly agree to release a third-party benefitting from the waiver without traditional consideration. In such a case, courts may find the waiver to be against public policy as inconsistent with a legislative enactment, such as a consumer protection statute.
Even though a waiver may meet all of the elements necessary to render it effective as a matter of contract law, if that subject matter is considered to be against public policy, it may still be found to be unenforceable. This determination is a matter of judicial discretion.
A party seeking to challenge a waiver based on one of the above grounds should consider the statute of limitations that applies to such a challenge, since the passing of time may make it more difficult to enforce.
Common Ways that Waivers are Challenged in Court
Even a well-drafted waiver can be challenged in court, and there are a number of common arguments a plaintiff may make as to why a waiver is invalid. A waiver might not hold up if it is unclear or ambiguous. For example, courts have held that blanket waivers, such as a general "I agree" button when signing up for a website, are not a valid result of "informed consent". A plaintiff might also challenge the validity of a waiver by arguing that he or she did not have adequate time to read it before signing, or did not have the capacity to understand its terms.
Along similar lines, a plaintiff might argue that a defendant failed to ensure that the plaintiff read and understood the waiver. Waivers have been struck down on the grounds that they failed to ensure the plaintiff was aware of and understood the specific dangers the waiver was intended to prevent, thus failing to provide sufficiently informed consent.
Informed consent must not only be freely given, but not the result of coercion or duress. A plaintiff might argue that a waiver of liability was the result of pressure that effectively eliminated his or her ability to consent to the waiver. Perhaps a social services agency only signed up an individual for a medical procedure if the individual first signed a waiver of liability in favor of the service agency. Waivers have been successfully challenged if the plaintiff can show that the defendant effectively threatened to deny a necessary service or item unless the waiver was signed. Along the same vein, some courts have invalidated a waiver of liability if the plaintiff can show the defendant had due or regulatory authority over the plaintiff, such as an employer-employee relationship.
Circumstances in which Courts Typically Uphold Waivers
Courts often uphold waivers in a variety of circumstances, particularly in the context of recreational activities. In the context of spectator sports, courts will frequently enforce waivers against spectators who enter a stadium or arena to watch a sporting event. Courts generally prefer to interpret a spectator’s purchase of a ticket as an agreement between the spectator and the venue that the spectator is aware of the inherent risk of an injury occurring and that a spectator assumes that risk. For example, in one case, the New Jersey Superior’s Appellate Division upheld a hockey rink’s use of liability waivers and assumption of risk clauses to prevent a spectator injured by a shattered hockey rink from suing the rink. Similarly, in another case, the Kansas Court of Appeals upheld the use of liability waivers in baseball stadiums, stating that a ticket holder’s voluntary acceptance of the risk of being injured by a foul ball has the same effect as a liability waiver. In that case, the court went so far as to state that as long as plaintiffs are voluntary participants in an activity with some inherent risk, courts should intervene "only in cases of willful and wanton misconduct." Courts will even enforce waivers against spectators who fail to conduct themselves "reasonably" while at a game. In Thompson v. McNeil Consumer Healthcare, for example, the Colorado Court of Appeals upheld a waiver for a spectator who was hit in the eye by a foul ball while standing up in an area of the stadium designated for standing. The court held that the spectator should have been more cautious and was taking an unreasonable risk by not remaining seated and keeping his head on a swivel to watch for foul balls. Therefore, they held that by failing to remain seated, the spectator was acting "unreasonably" and thus had "assumed the risk that he would be injured" by agreeing to the liability waiver.
Courts have also upheld waivers in recreational activities such as mountain climbing, skiing, rock climbing, scuba diving, horseback riding, gymnastics, bungee jumping, and sky diving. For example, in Miley v. Everest Mountaineering, Inc., the Vermont Supreme Court upheld a waiver for a client who died during a mountain climbing activity. In that case, the Court held that "when a climber attempts to climb Mt. Everest, he or she is participating in an inherently dangerous activity." Similarly, in Precedo Inc. v. Weld, the Idaho Supreme Court upheld waivers executed by parents of minor children who participated in a gymnastics program. The court reasoned that the parents knew the nature of the risks their children faced and that the inherent risks of gymnastics could be assumed. In Flores v. Dardanelle Outdoor Center, the Arkansas Supreme Court upheld a waiver signed by the parents of an 11 year old who broke her back while participating in a "Blob" or "Blob Jumping," a new sport that is similar to air bag jumps. And in Cummings v. Clear Lake City Recreation and Community Services ("CLCRCS"), the Texas Court of Appeals upheld a waiver filed by a sky diver who was injured when his parachute failed. The court held that the danger of failing parachute was one that was apparent and one which the customer must accept to enjoy the recreation.
Courts have also upheld waivers in the context of dangerous recreational activities that have less of an inherent risk or are inherently less dangerous than mountain climbing or skiing. For example, in Smith v. Clark, the Washington Court of Appeals upheld the use of a four part warning and liability waiver agreement for an electric go-kart track that was fairly new to the market, which experienced technical difficulties and had limited customer reviews. And in Taylor v. Kerrville, Texas, International, LLC, the Texas Supreme Court upheld a liability waiver in the context of a zip line that was newer than several other zip lining companies. Finally, even in some product liability cases, courts have enforced waivers against consumers if they have agreed to the waiver and if the product is dangerous. For example, in Velinsky v. Midland, the Kansas Court of Appeals upheld a waiver signed by a woman who was electrocuted while changing the bulb of a lamp. The court held that the woman’s wife was responsible for the danger and should have assumed the risk of the danger since he was an adult.
When Waivers Fall Short in Court
Waivers are commonly used in many different contexts, but there are specific circumstances that can cause them to fail or be unenforceable. In certain cases, a waiver may not protect a company because the party seeking to enforce the waiver committed a level of misconduct sufficient to vitiate the waiver. For example, many jurisdictions do not enforce a contractual agreement to waive liability for obligations resulting from gross negligence or fraudulent conduct. (A typical concession for grossly negligent conduct is simple negligence.) This holds true even where the waiver is conspicuous and clear and even if the waiver agreement expressly states that it covers gross negligence. However, where it is a mutual agreement to assume all future risk, many courts find liability for gross negligence or fraud to be outside of that scope. Of course, the definition of gross negligence can vary state by state, but it generally requires that a person’s actions demonstrate a reckless disregard for the safety of others or a conscious indifference to consequences. Similarly, any liability for fraud cannot be waived, but the meaning of fraud is often cited to be different from negligent misrepresentation. It is important to understand how your state traditionally classifies and distinguishes these terms, as constitutions and statutory provisions in some states may provide even broader scopes . In addition to the inapplicability of waivers to intentional conduct (gross misconduct), certain states do not enforce a waiver when it results in unconscionable terms. In other words, one party unfairly took advantage of the other party and created a very unfair circumstance. Whether the unconscionability exists due to substantive terms or procedural factors, a court may hold a waiver of rights to be unscrupulous and unenforceable. Many courts will examine the text and context of the contract and identify if the terms unfairly shock the conscience. States may also base their decision on a party’s relative bargaining power and a lack of meaningful choice in creating the contract. Courts generally consider two aspects when assessing the unconscionability of a term: One element that is sometimes considered is whether the term or contract is adhesionary (meaning the party could not reasonably change its terms). This factor is given more weight in consumer contracts than waiver agreements, but it is still something that is considered. A waiver could also be rendered unenforceable if it is held to violate public policy. For instance, in worker’s compensation programs, waivers of subrogation in connection with a claim following a work related injury may violate that statute.
Best Practices for Drafting an Enforceable Waiver
Just like you cannot conclusively determine whether your waiver is enforceable by simply reading the statute of limitations, you also cannot unequivocally ascertain your waiver’s likelihood of success by skimming through a waiver. A waiver that may be deemed valid in one court may be unenforceable in another. Nonetheless, courts have identified certain characteristics that make waivers more likely to be upheld, and they are worth considering when drafting a waiver. Generally, a waiver is more likely to be upheld where it:
Some courts have held that in order to be enforceable, the language of the waiver should be conspicuous, as defined by the UCC. Others consider conspicuousness as a function of the effect of the contract on the plaintiff, rather than focus on language alone.
Some courts also noted that a waiver will not be enforced where it contravenes public policy. For example, waivers have been held unenforceable where they violated statutes providing for strict liability, workers’ compensation rights, consumer protection regulations, or where they contravene laws or legal rights.
Still others evaluate waivers for unconscionability. Under their analysis, contracting parties are not on equal footing where one party has superior bargaining strength or where the waiver releases a party from harm caused by its own reckless, willful or grossly negligent conduct.
Case Examples of Waivers in Court
No matter how commonplace or ubiquitous these forms may seem, it is still important to have safe and enforceable waivers. Judges dislike waivers that they perceive as unfair or free passes for companies to be reckless, and the liability of a company because of an unenforceable waiver can far exceed the gains from the allegedly free pass. Besides that, legal winds can change quickly, and even though a waiver may be enforceable in the jurisdiction where it has been used for years, that may not always be the case.
Foremost in the context of ski resorts and outdoor recreation, ski resorts often include waivers and releases in tickets and other printed material. In Balandran v. Laboratorios Cifra, SA, a 2005 case out of Texas, a series of tourists from Mexico were injured on a ski trip when a coach bus collided with the back of another vehicle. The blood testing results came back with an indication of the anti-arrhythmic drug Nifedipine in the blood of a family member, prompting a lawsuit. The plaintiffs argued that the ski resort was responsible, and the resort argued that the group’s waivers and releases were enforceable. The Texas Supreme Court sided with the resort. In the opinion, the court stated that "as a general rule, contracting parties have the right to obligate themselves to whatever burden they choose." The opinion also noted that a waiving and releasing party must understand the nature and extent of the rights he or she waives , so the communication of the waiver to the class on the ski trip was also an issue. The court sided with the ski resort again by stating that everyone that the organizers had communicated the waivers to had given their consent knowingly.
In another case, this time concerning an amusement park, Lienhart v. Oakwood Amusements LLC, a man who had a cochlear implant hurt himself at an amusement park and attempted to sue the park for negligence. The manager of the parking lot had told the driver to park in a place that was not wheelchair accessible, and the driver did not see that the parking spot was for handicapped placards only. The man got out of the taxi, slipped on the curb, and hit his head on a concrete barrier. Upon appeal, the court stated that even if waivers were unconscionable at common law (the doctrine of unconscionability holds that courts can invalidate contracts because a lack of meaningful choice, which usually refers to a lack of bargaining power coupled with a meaningful provision, creates some kind of unjust situation in the creation of the contract), Pennsylvania courts have to follow precedent. Even though new Pennsylvania changes meant that unconscionability was now recognized as public policy and that liability waivers to further public policy could be unenforceable, the judges stated that the state supreme court has not adapted those changes to the common law search and rescue safety function provision. Waiver was upheld.