Liability Waiver

Updated on March 26, 2024
Article byRutan Bhattacharyya
Edited byRutan Bhattacharyya
Reviewed byDheeraj Vaidya, CFA, FRM

Liability Waiver Meaning

A liability waiver refers to a legal contract involving an organization and a person participating in a business-related event. It educates the participant regarding risks associated with a particular activity. Moreover, it prevents the participant from suing the organization if the former suffers loss or damage resulting from that activity.

Liability Waiver

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Also known as a release form, such a document can only shift some responsibility from the business to the participant for damages arising due to ordinary negligence. However, this legal contract cannot absolve an organization of liability for intentional injuries or gross negligence. Different types of such documents exist, like general, personal, and mutual liability waivers.

Key Takeaways

  • Liability waiver definition refers to a legally enforceable document that involves two parties — a company and an individual participating in an activity associated with that company.
  • A liability waiver document communicates the risks related to the activity. It states that the participant agrees not to file a lawsuit against the business in the case of any damage or loss.
  • Some elements of the document include the inherent risks, release clause, signature, and confirmation. One can find a liability waiver sample online to get a clear idea of its components.

Liability Waiver Explained

Liability waiver definition refers to a legally binding agreement typically signed between a business and a participant before any activity that might result in a legal liability. The document communicates all inherent risks to the participant. Moreover, it releases the company from any liability that may arise in the event of any damage or loss.

These forms are common for organizations that organize activities involving certain inherent risks. Some examples of such businesses include companies offering horseback riding lessons, rock climbing lessons, etc.

If individuals do not choose to utilize a release form, they risk subjecting their business to unnecessary or unwanted disputes. Although there could be some advance fees related to disseminating, developing, and signing this document, one can protect their organization from legal obligations both in the short as well as long term by utilizing it.

That said, one must remember that such a contract only offers some protection. It does not provide total protection. Also, individuals must note that such documents hold up in a court only when they fulfill specific factors. The best way to know everything regarding enforceability is to contact a business lawyer.

Some key benefits of this document include the following:

  1. It acts as a layer of legal protection for an organization.
  2. This document safeguards a business’s finances in the event of a loss or damage to personal property.
  3. The inherent risks mentioned in the documents make the participants more aware of the potential dangers. Hence, they tend to engage in the activity more responsibly.

Types

The different types of liability waiver documents are as follows:

  1. Personal Injury Release Form: It is a contract outlining that if the participant suffers any injury, they will not file a lawsuit against the company seeking compensation.
  2. Mutual Release Form: This type of contract has application in situations where a couple of parties have a dispute but want to resolve the same without any legal procedures. 
  3. Accident Release Form: If a participant signs this document, they cannot sue the company seeking compensation if a car-related accident occurs.
  4. Contractor Release Form: By signing such a contract, contractors waive their rights to sue a client if they suffer any damage or accident.
  5. Activity Release Form: It is a legally binding agreement between the activity provider and the participant stating that the latter will not sue the former for damages or injuries.
  6. Property Release Form: Such a document does not allow the participant toopt for an out-of-court settlement in case of damage to any personal property.
  7. General Release Form: Usually, the use of such a document is common in situations where participants broadly give up every unknown and known claim against the business.

Irrespective of the name or type of release form, they essentially perform the exact function and require personalization for a business situation. Although the language typically differs slightly, such documents enable companies to avoid lawsuits.

Examples

Let us look at a few liability waiver examples to understand the concept better.

Example #1

Suppose ABC Company is an adventure sports business in the United States. Certain activities offered by the organization, for example, bungee jumping, ziplining and paragliding, are associated with certain risks. In other words, there always remains a chance of injuries when one engages in such activities. Because of this reason, the company requires individuals taking part in its activities to sign a liability waiver form.

The legally binding document outlines all risks involved. Once a person signs it, they cannot sue the business for any loss or injury that may arise from such activities.  

Example #2

OceanGate, the operator of Titan (submersible), which imploded in June 2023, plunging five passengers, made all the customers sign liability waiver forms before they entered the underwater vehicle.

The document outlined the inherent risks. For example, it stated that the vessel was not certified by any regulatory body. Moreover, it mentioned that the vehicle was constructed of materials that were not widely utilized in the construction of human-occupied submersibles.

The passengers waived their rights to claim damages by signing the legally binding document. Hence, the paperwork protects the organization from any legal liability.

How To Write?

An individual must include the following key elements to write such a document:

#1- A Formal Structure

The key components of a formal structure include a descriptive, clear title, date, signature, contact information of the business and participant, simple language, a warning section, and separate sections.

#2- Risks Involved

This document must clearly state the risks the participant will be taking by engaging in certain activities. Explicitly outlining all risks allows individuals to decide whether they want to participate at all. 

#3- Choice Of Law Provision

This component is essential as the judge has to determine whether the release form is valid with regard to lawsuit prevention. This means the business needs to mention which state laws should be applicable at the time of interpreting the document.

#4- Release Clause

This clause clearly states that the organization will not have any liability in the event of any loss or damage.

#5- Signature And Confirmation

The confirmation section simply outlines that the participant understands the release form. One can find it before the signature line. Once the participant reads and understands the contract, they must sign the document. The signature acknowledges their agreement to the release form’s terms.

If one is confused about the above key aspects, one can consider looking at a liability waiver sample available online. Alternatively, they can follow these steps to create such a document:

  1. Identify every inherent risk related to the business’s offerings.
  2. List down the names of all stakeholders impacted by such inherent risks.
  3. Consider potential future threats.
  4. Compile all liability insurance policies.
  5. Figure out which governing laws should be applicable.
  6. Schedule a consultation with contract lawyers.
  7. Bring all notes and findings to the meeting with the lawyer
  8. Receive the draft of the legal contract.
  9. Approve the draft.
  10. Ask stakeholders to sign the document
  11. Keep copies of the signed documents.

Liability Waiver vs Disclaimer

Many people confuse liability waiver documents with disclaimers when they do not clearly understand how they differ. The table below has highlighted the distinct characteristics of the two concepts so that one has no doubt.

Liability WaiverDisclaimer
This is a legally binding, written agreement between a business and a participant. A disclaimer refers to a statement highlighting key details regarding a product or a service while restricting the liability.
It protects a business from liability claims of individuals taking part in some activities associated with the business.A disclaimer restricts liability and manages the expectations of customers for certain products, informational content, or services.
Release forms focus on a certain service or activity. They state the inherent risks and the customer’s agreement not to sue the business. A disclaimer broadly addresses limitations or general information.
It is enforceable only when the document is transparent, drafted properly, and signed. Also, it must be valid per the legal jurisdiction.A disclaimer is enforceable when compliant with the relevant industrial guidelines and laws. Also, it must be transparent.

Frequently Asked Questions (FAQs)

1. Do liability waivers expire?

Generally, these documents expire after a certain period. That said, the duration of validity depends on the document’s wording.

2. Can a minor sign a liability waiver?

Typically, minors lack the full legal capacity to put their signature on a legally binding document. In other words, a release form signed by a minor is invalid and thus unenforceable. A minor’s parents can sign such a document on their behalf.

3. Does a liability waiver need to be notarized?

Whether or not this document requires notarization depends on the law of that state or country. In certain places, notarization is necessary for the document to be legally binding. If there is uncertainty regarding this requirement, one can get in touch with a business lawyer.

4. Are liability waivers enforceable in Texas?

Yes, such documents are enforceable in Texas, United States. However, one must note that the agreement needs to fulfill specific requirements.

This article has been a guide to Liability Waiver and its meaning. Here, we explain its examples, how to write it, differences with disclaimer, and types. You may also find some useful articles here –

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