What does it mean to be released from liability? If you’ve ever gone skydiving, bungee jumping, or visited an escape room, then you’re probably already familiar with release of liability waivers. In this article, we’re going to go over what they do, what to include in them, and when you should use them!
What is Release of Liability?
A release of liability is a legally-binding agreement where one party waives the right to hold the other party responsible for injuries or damages. When the releasor — the party signing the liability waiver — signs, they are providing formal acknowledgment that they understand the risks of a given activity and will not sue the releasee if an injury occurs.
Other names for a release of liability include:
- General waiver
- Waiver of liability
- Liability waiver form
- Exemption/exoneration from responsibility
- Legal release
- Exculpatory clauses (in contracts)
What’s included in a Release of Liability?
Whether your release of liability is structured as a standalone document or a clause in another contract, there are a few pieces of information that you’ll need to include to ensure that the waiver is legally binding.
Name and address
Including the names and addresses of the parties in the release of liability will clarify who the release applies to as well as who the releasor is. A date should also be included so that it can be proved in court that the waiver was signed prior to any injury or damages.
Description of risks
A release of liability waiver may be deemed void if the risks were misrepresented to the releasor. As such, it’s essential that you list and describe the risks associated with the activity so that the releasor is indisputably aware of them at the time of signing the waiver (and is now responsible for the risks or any injuries/damages that may result).
Definition of terms
Including a section that defines all the terms used within the release of liability waiver will remove ambiguity and ensure that all the parties have a uniform interpretation of the terms in the agreement.
Statement of release
Your release of liability waiver should include a statement of release.
Here’s an example of what that could look like:
“The Releasor hereby assumes all risks of harm, injury, and potential death as a result of the activities specified above and agrees to forever discharge, indemnify, and release the Releasee from damages, expenses, costs, causes of action, claims, and general liability due to the injury, loss, death, or damage to the Releasor.”
Finally, it’s essential that your release of liability waiver includes a legally binding signature to ratify the terms and details specified in the agreement. Without a signature, it will be nearly impossible to enforce the release of liability in court.
In general, electronic signatures are preferred for release of liability waivers as they are able to prove the identity of the signatory. Due to the E-Sign Act passed in 2000, electronic signatures are just as valid as wet ink handwritten signatures.
What does it Mean to be Released from Liability?
Being released from liability means that you no longer have a legal obligation to the Releasor, nor can you be held liable if any damages or injuries occur as a result of the activities described in the waiver.
When to Use a Release of Liability?
Release of liability waivers can be used in any scenario where a person or company could be sued if an activity goes wrong. They are often signed right before participating in activities that carry risk but can also be used in other scenarios.
Example #1: risky activities
Release of liability waivers are often used for activities that are dangerous or have the possibility to become dangerous. This includes extreme activities like skydiving and bungee jumping but also other activities such as playing golf, riding horses, renting boats, or going rock climbing.
Example #2: marketing assets
When your photo or a creative representation of your likeness is used in advertising campaigns for the purpose of profit, you’ll often need to sign a release of liability waiver beforehand.
The most notable example of this is Nirvana’s Nevermind album where the baby pictured in the cover later went on to sue the band. More common cases involve the use of your photo in online ads, TV commercials, and billboards.
Example #3: information releases
Information releases are required when a third party releases any financial, employment, or medical information that is considered privileged or confidential to a specific party.
Example #4: lending releases
If you loan your car, tractor, lawn mower, or any other piece of heavy machinery to someone else, then having them sign a release of liability could be a good idea. Without one, you could be legally liable for any damages or injuries that occur while they’re using your vehicle/machine.
Example #5: duty releases
Those who are babysitting, petsitting, or housesitting may want to create a release of liability waiver with their client. This will ensure that any injuries or damages resulting from tasks outside their scope of work will not leave them liable to legal action.
When is a Release of Liability Not Upheld?
There are a few situations where a release of liability will not be upheld even if it has a legally binding signature from the Releasor.
If the Releasee acts negligently, then the release of liability waiver is unlikely to protect them. For instance, if a bouldering gym provides inadequate or faulty safety equipment, then they will still be held liable for any customer injuries.
This is because the injury was a result of the company’s gross negligence as opposed to the inherent risks associated with the activity. Liability for negligent acts cannot be absolved through the use of waivers.
Release of liability waivers will also not apply to dangerous activities where the company is responsible for making the activity safe. For instance, most jurisdictions do not allow construction companies to request a release of liability waiver from their employees.
While the activity is inherently dangerous, it’s also the responsibility of the company to minimize the risk with safety protocols and to provide proper safety equipment for everyone working on the project.
Any lack of clarity or factors that make the release difficult to read (such as small fonts and legal jargon) could lead a court to not uphold a release of liability waiver. This is why the description of risks and definition of terms sections are so important when drafting waivers.
If an injury occurs due to factors that were not included in the release of liability, then the Releasor may still be able to sue the Releasee. Most courts are stringent when it comes to waivers so you need to ensure that it meets all state-level regulations.
Minors are not classified as legally competent, which means they are not able to enter into legally binding contracts, agreements, or release of liability waivers. Laws vary from state to state, but most courts will not uphold a release of liability waiver signed by a minor.
In such cases, it is often recommended to have the parent or guardian accompanying the minor sign the release of liability waiver instead. This will ensure that the signatory in your waiver is legally capable of entering into binding agreements.
As you can see, release of liability waivers are an essential agreement that protects businesses from being sued or receiving criminal charges. If you want to keep your company safe from liability, you can use our free Release of Liability template.
You can also sign up to PandaDoc for a 14-day free trial to ensure that your waivers all contain legally binding electronic signatures with PandaDoc Waivers!