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Don't make these 3 mistakes with your liability waiver/assumption of risk form

Thank goodness there are people brave enough to operate businesses that involve activities with inherent risk.  I love paintball, rock gyms and even just my health club, and my kids love the local indoor trampoline park and rollerskating rink, none of which could operate without the use of proper liability waiver/assumption of risk forms (let's just call them "Waivers" in this article for ease of reference).

Unfortunately, as I fill these out at various establishments I patronize, I often see legal problems with the these Waivers.  Sometimes they are minor problems that create ambiguity or make the Waiver harder to enforce.  Other times, the problems are glaring, and can even make the Waiver not even worth the paper it's written on.  Seriously.

Here are three of the biggest problems I often see on these Waivers.  If any of these problems are in the Waiver you use, I would suggest that you treat it as you would treat a brake problem in your car.  Take it in to have it looked at right away.

  1. Not properly naming the released party.  As is suggested by the title of the document, one of the major goals is to have people who patronize your business agree in advance to release you from liability.  Unfortunately, this part of the release is often lost in translation.  In order to be effective, the release must apply to both your business (including whatever legal entity it is) as well as the owners and employees of your business if any - since all of them can otherwise be sued individually.  I've seen mistakes here that range from failing altogether to state who is being released (which makes the release useless) to incorrectly naming the business (for example naming a DBA when the business is a corporation). 
  2. Having parents/guardians waive the rights of their children.  The issue of liability to children who might get hurt patronizing your business is a difficult one.  The problem is that children have the inherent right to sue and recover from people who cause them injury yet, since they are under the age of 18, cannot legally sign an agreement to waive those rights!  I often see waivers wherein parents or guardians are called upon to waive their children's rights.  Unfortunately this is completely ineffective since the law is quite clear that parents cannot waive these rights on behalf of their children.  The only solution to this is to have parents/guardians sign an agreement to indemnify your business against any claims that their children might file against your business.  In other words, their children would still be free to file a lawsuit if they were to be injured, but the parent/guardian is agreeing to reimburse your business for any loss it incurs from the lawsuit.  This is not as good as waiving the right to a lawsuit altogether, but since parents are the ones who usually will have to file a lawsuit on behalf of their children, this should dissuade all but the most determined of them from thinking this is a good idea.
  3. Not having all three required elements of protection.  A well drafted liability waiver/assumption of risk document should provide you with three redundant "layers" of protection.  The idea is that someone who is injured must pierce all three layers before you or your company can be held liable for their injuries.  The first layer of protection is the assumption of risk.  When it comes to recreational activities that are inherently risky (think skiing, amusement parks, hang gliding and the like), the law makes it much harder for someone to sue you for their injuries if it can be shown that they fully understood the risks of the activity and agreed to assume that risk.  The second layer of protection is a waiver of liability.  Contract law allows people to bargain away their right to file lawsuits.  In this case, the waiver of liability is a bargain whereby in return for being allowed to participate in the recreational activity, participants agree to give up (to a certain extent) their right to sue you or your business for their injuries, even if the injuries were caused by your negligence.  Finally, the third layer of protection is an indemnification provision.  Indemnification is a legal concept whereby one person agrees to reimburse another person for any losses that second person incurs, usually as a result of the first person's actions.  In this case, an indemnification provision would state that participants agree to indemnify you (reimburse you) for any and all losses you or your business incurs in any way resulting from their participation in the recreational activity.  This includes on-site costs (such as first aid or ambulance costs that may be billed to you), as well as any potential liability to anyone including the participant or the participant's family.

Having a well drafted liability waiver/assumption of risk document that you consistently have all participants (or their parents) sign, and which you carefully file away safely, will go a very long ways toward allowing you to continue to operate your recreation business with a reduced legal risk profile.  As with all risk reducing strategies, however, it will not eliminate your risk.  A complete risk mitigation strategy will also include appropriate business entity selection, appropriate insurance, and good business practices.  Watch this blog for more articles on each of those components.

I hope this article was useful for you.  If you would like your existing liability waiver/assumption of risk document reviewed or would like a new document drafted, I would be very happy to assist you.  I also always welcome and appreciate your comments, feedback and ideas for future posts you'd like to see.

The contents of this website are intended for general reference and educational purposes only and should not be relied upon as legal advice.  No attorney-client privilege is established between you and Clear Focus Law or attorney Eric Hsu absent a fully executed legal services agreement.