Liability waivers: 4 things to know

Clark surprised Lois with a skydiving jump for their anniversary. Excited at the new experience, they woke up early to head over to the airfield. Once there, they signed some paperwork, listened to a safety briefing, and then lifted off. When they reached altitude, Clark jumped first followed by Lois. The wind rushed past their ears; the lagoon sparkled in the morning light. All was well. And then Lois tried to deploy her chute. Nothing happened. Unpanicked, she reached for her secondary chute. But it didn’t deploy either.

When the tears dry and the finger pointing stops, who pays? It will depend on the paperwork that Lois signed before jumping as well as other factors we’ll discuss shortly.

Can’t happen to you? Think again. If you’ve ever joined a gym, went scuba diving, or participated in a field trip, then you likely received a document known as a liability waiver at the start of the sign-up process. Most people sign the paper with little more than a glance. After all, waivers are a necessary evil if you want to do the activity. But as Clark and Lois discovered, a liability waiver is not something to take lightly if the worst happens.

That’s because liability waivers are legal contracts. Sometimes they can be enforced in court. And when they are, the waiver wipes out important legal rights—namely your right to seek money or other compensation if you are injured during the activity.

As a result, it’s useful to understand when a liability waiver will—and will not—be enforced. And that answer usually turns on four factors.

First, did the waiver violate state or public policy? If so, it automatically fails. For instance, in some states a company cannot force its employees to sign waivers concerning work activities. So, if Lois went on a tandem jump with a skydiving employee who also died during the accident, any liability waiver between the company and the employee would face an uphill battle to be enforced. Likewise, many states do not allow manufacturers and retailers to disclaim liability for defects in their products. Thus, even if Lois’ liability waiver attempted to protect the parachute manufacturer, that part of the waiver likely would not survive because product liability is not the kind of risk that normally can be waived.

Second, did the injury result from ordinary negligence or a risk specifically discussed in the waiver? For instance, if the skydiving company checked the gear out beforehand but missed the problem, there’s a decent chance that would be considered ordinary negligence and thus covered by the liability waiver. By contrast, if the injury flowed from an unforeseeable risk or a condition that the company knew about but failed to fix, then the liability waiver is on shaky ground. For example, if the skydiving company knew the parachute might have a problem and used it anyway, that likely would be gross negligence and therefore unprotected by the liability waiver.

Third, what does the liability waiver actually say and how does it say it? Clear, conspicuous language increases the odds a court will enforce a liability waiver; ambiguous, hidden words decrease those chances. For example, a document titled “Application” or “Registration” is much less likely to be enforced than a document titled “Waiver of Liability” or “Assumption of Risk.” Similarly, a document that describes the risks in legalese using small font is less likely to withstand judicial scrutiny than a document that explains the risks in plain English using big, bold font that highlights the signer is waiving rights.

Fourth, if important facts were misrepresented, then it doesn’t matter how clear and understandable the liability waiver may have been written. The misrepresentation will unravel the contract—assuming that you can prove the misrepresentation, which can be easier said than done. For instance, if the skydiving company said the parachute was brand new even though it had been used hundreds of times, then that misrepresentation might invalidate the liability waiver.

Bottom line: We all sign liability waivers. Many of them. But we seldom give them a moment’s thought—not until something bad happens anyway. And then they become some of the most important contracts around. In those cases, the battle will center on how well written the contract is and the steps that the company took to identify and fix dangers.

Individuals who’d like to figure out whether a liability waiver blocks them from making a claim should speak with a lawyer. And the same for companies and service providers who want to make their liability waivers as ironclad as possible.

This column is for informational purposes only and is not intended to be taken as legal advice. For your specific case, consult a lawyer.