The Basic Clauses of a Release of Liability Agreement
The release of liability is a contract agreement between two parties, usually a business and a customer or between two businesses/entities that clears the business of any fault (hence liability) resulting from use of its products, services and spaces, plus the negligence of all or any of its employees, partners and agents.
In simpler terms, the agreement renders the business and its owners free of any crime should a person suffer any harm or experience damage to their property while in the business’s premises or when in use of its services, even if it results from the negligence of the business’s staff.
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A liability waiver or release of liability agreement is a very important and sensitive document, but it only assumes such power through its legal wording. There are six specific clauses that always appear in a release of liability form, including any decent liability waiver template one might get from the internet.
- The Waiver of right to sue clause
This clause dictates that the signatory has released the business or service provider from being liable for any injuries, accidents, illnesses, deaths or economic losses that he or she might experience while taking part in any of the business’s activities.
This is based on the assumption that the signatory has understood the potential hazards associated with taking part in the activity. The clause also asserts that the signatory has formally waived their right to sue the business for any of the above-mentioned side effects of taking part in the activity.
- The Assumption of Risk clause
This clause further extends the assumption that the signatory knew of all the potential hazards and risks of taking part in such an activity. The clause asserts that the signatory was of sound mind and therefore understood the nature of the activity they were taking part in.
It also pushes that the signatory, after noting the potential risks, voluntarily accepted to partake of the activity, and therefore holds the business not to blame for any resulting dangerous side effects.
- The ‘hold harmless’ agreement clause
The ‘Hold Harmless’ clause asserts in clear writing that the signatory agrees not to hold the business responsible in any way for any negative side effects that may result from taking part in its activity. That might also include specifics such as attorney’s fees or settlements, which the signatory promises to pay back should the business shoulder them at any point.
- The Express Indemnification for Any Losses Incurred Clause
In addition to clearing the business owner of any fault, a waiver of liability statement also helps the business cover any losses incurred as a result of the signatory’s accident, illness or any other negative side effect resulting from participation, by making the signatory shoulder the blame instead. The Indemnification clause is responsible for that assertion.
- The Medical Consent Responsibility Clause
While slightly similar to the indemnification clause, the medical consent clause differentiates itself by asserting that the signatory has consented to cover any medical costs that may spring up as a result of any negative side effects accrued from taking part in the business’s activity.
- The Understanding and Acknowledgment clause
Usually, the final clause before the signatory signs, this clause assumes that the signatory has read and understood the agreement in its entirety before signing, and they have been of sound mind.
Some companies also include the clauses below to strengthen the agreement even further. You can also get a good waiver of liability statement from the internet that features these additional clauses.
- The Severability clause
This clause is mostly used by businesses and entities that have a lot to lose. It determines that the agreement is considered clause by clause and that if one clause is found invalid or inappropriate for use, the other clauses can still be used for full legal effect.
- The Successor binding clause
This clause serves to cover more than just the immediate business owners from liability; it also protects the business’s partners, agents and sometimes, the future owners of the business from any litigation on the same case.
The clause also limits the signatory’s suing abilities by binding not just him or her, but also any future heirs, spouses, estate executors, dependents and successors into the agreement. This means that they too, just like the signatory, cannot hold the business liable for its mistakes.
How to make sure your waiver is fully enforceable?
Whether you call it a release of liability form or a waiver of liability statement, it’s important to remember that your waiver is only as strong as its contents. There is no problem with getting a free release of liability form from the internet or someone else in your line of business, but it might not work.
A waiver needs to be strong and enforceable in order to be acknowledged in court. You can make yours more enforceable with the tips below:
- Make sure it is a standalone document
Many businesses and entities prefer to bury their release of liability form under a pile of other contracts, such that they get more done in a shorter while. The trouble is that in courts of law, this can be seen as an attempt by the business to get more people to sign the form without reading its contents.
That’s why it’s important that you create your own form or use a liability waiver template that can be used as a stand-alone document.
- Make sure your waiver is directly attuned to your business
There is no problem with photocopying a friend’s liability waiver statement or getting a free liability waiver template from the internet or business resource center. The only downside is that they may be designed for a general audience, not with your business in mind.
As a result, a non-specific release of liability form is easy to denounce in court because it may not speak directly for your business, its nature and assumed risks. If you must use a free release of liability form from a friend or a liability waiver template from the internet, try to edit it first with your business in mind. Or look for that best suits your exact business.
- Know your state’s, industry’s and city’s standing on waivers
It’s a common misconception that all liability waiver agreements are enforceable in every state. That’s simply not true; a number of American states do not recognize liability waivers at all. Others recognize them in particular situations, while others have a constantly changing position on the acceptability of waivers.
What does your state recognize as an enforceable liability waiver? Also, some cities and trades have specific requirements for enforceable liability waivers that you should be aware of.
- Expose and discuss all potential risks within the waiver
There is always a possibility that your release of liability form agreement will be struck down by a court of law and rendered useless. If that happens, the only way to protect yourself and your business from being held liable is if the agreement stipulated and defined the risks associated with your business and taking part in its activities.
Such an agreement can then be used as court evidence that the signatory knew about the potential risks beforehand but chose to go ahead anyway. All potential risks can be fitted into a separate clause of their own.
- Understand and work around the ‘spouse’ effect
If you have one member of a couple sign a release of liability form, you can still be sued by the other half of that couple in court in some states. To protect against this loophole, it’s important to add a successor binding clause in your liability waiver.
- Use clear, sharp language
Agreements are very sensitive documents, which is why they need to be worded with care. Legal language must be used, and one must understand the power of terms like ‘negligence’ in making the agreement powerful.
Some states will only accept a liability waiver statement if it features ‘gross negligence’ of the business and its employees rather than just ‘negligence’ as a cause of harm or damage. To make it even more enforceable, make sure the agreement features a section on definitions, such that the meaning and limits of every major word and phrase are explained.
If the legal language makes it hard to create your own waiver of liability statement, you can always look up a free release of liability form from the internet and copy its text (as long as it speaks directly to your business) or you can buy a liability waiver template from a business resource center. You can also have one drawn up for you by an attorney.
- Remember to cover minors
Until a few years ago, many states did not recognize the release of liability agreements signed by minors. But that has changed, and since minors are just as prone to destroying property and harming themselves while in a business’s premises as adults, you need to feature a clause in your agreement that covers their involvement.
- Have your waiver approved by an attorney
To make your waiver of liability statement even more enforceable, it’s important that you have it scanned and approved by your attorney before you add it to your business’s contracts. This works as a second, cheaper alternative if you can’t hire a lawyer to create a custom waiver of liability statement for your business.
A good attorney i.e. one with considerable expertise with business contracts or risk management will analyze and prim the wording, the clauses and the language for better enforceability and effect.
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