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The Importance of a Well-written Waiver

By Doyice Cotten 

Sport, recreation, and fitness businesses regularly depend upon liability waivers for protection from liability for injuries resulting from the negligence of the business. What is still astounding is the quality of some of the waivers relied upon by some businesses. Some small businesses have investments of hundreds of thousands of dollars; other businesses’ investments are in the millions. In spite of this, some are relying upon what seems to be a 25 cent waiver.

In New Pelican Charters,LLC v. Claimants (2019), we see a case in which a deep sea charter fishing business was sued by two of its clients when its boat collided with a shrimp boat anchored at sea. Each of the two men suffered serious back injuries and filed suit alleging negligence on the part of the company.

The Waiver

Both clients signed a waiver of liability prior to the excursion. The defendants claimed that they were shielded from liability by the waiver. The pertinent part of the waiver read:

I will not hold [Deep Sea or the M/V New Pelican] or their employees, agents or other associated personnel responsible if I am injured as a result of any problem[s] (medical, accidental, or otherwise) which occur while on the boat or otherwise participating in the trip.

Allegations

The case fell under the jurisdiction of admiralty law since the event took place at sea.

Allegations by the plaintiffs included the following:

  • Plaintiffs responded that the waiver form did not clearly and unequivocally provide a waiver for Deep Sea’s own negligence.
  • They argued that the form never mentions the word “negligence” or otherwise indicates that it includes claims of negligence, which renders it insufficient to bar the claim that Deep Sea was negligent.
  • They also argued that the waivers lacked consideration.

The defendants responded with:

  • Although the waiver did not specifically mention negligence, the broad language waived claims regarding “any problem.”
  • The language shows that the intent of the parties clearly and unequivocally was to exempt it from liability from any problem that arose during the trip, including negligence.
  • They added that the plaintiffs signed the waivers voluntarily; the bargaining power was equal because plaintiffs could have found a different fishing service.
  • They pointed out that there was consideration; plaintiffs were allowed to go on the excursion on the boat.
  • They stated that the language of the waiver form speaks for itself and that plaintiffs failed to identify any alternative interpretation.
  • They also pointed out that under admiralty law, the waiver does not have to include the specific word “negligence.”

The Law

The court stated that:

  • Generally, applying maritime law, a contract that provides for indemnification for or release of a party’s own negligence must be clearly and unequivocally expressed.
  • Under maritime law, a statement releasing a party from “any and all claims” is insufficient, standing alone, to include the party’s own negligence.
  • A waiver does not have to explicitly state that it includes a party’s own negligence.
  • A waiver is enforceable if the language of the contract reasonably indicates that the parties intended to include the indemnitee’s own negligence as part of the agreement.

The court made clear that the issue on summary judgment is whether the forms were legally sufficient to waive plaintiffs’ right to bring suit against Deep Sea.

The court emphatically stated that they were not. The court explained that:

  • The waiver forms do not explicitly provide that the plaintiffs were waiving their ability to sue Deep Sea in the event that they were injured due to Deep Sea’s negligence. It noted, however, that such was not required.
  • The plain language of the waiver does not otherwise indicate that the parties intended to include Deep Sea’s own negligence as part of the agreement.
  • The language of the forms, which purport to cover “any problem[s] (medical, accidental, or otherwise) which occur while on the boat or otherwise participating in the trip,” is equivalent to a waiver covering “any and all claims.”
  • The court noted earlier that such language, by itself, is insufficient to include negligence.

The Ruling

Accordingly, because the waiver forms do not clearly and unequivocally provide for indemnification for or release of Deep Sea’s own negligence, plaintiffs have not waived their ability to sue Deep Sea for their injuries. Summary judgment in favor of defendants is denied.

Risk Management Take-away

The main take-away here is that every business needs a well-written waiver. The addition of the one word, “negligence,” in the waiver might well have allowed the enforcement of the waiver and provided protection for the company. Every waiver should state that the signer is releasing the provider from liability for injuries resulting from the negligence of the provider.

Photo Credit: Thanks to Omer Unlu via Flickr.

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