By Doyice Cotten
The preferred form of waiver usage in recreation and sport businesses is quickly becoming electronic (waiver available on a computer, tablet, or online). I am asked whether electronic waivers are as valid and effective as paper waivers. Today, such waivers are in widespread use and there is no question as to their validity. This writer has found no cases in which a waiver has failed simply because it was not a paper waiver. They do fail on occasion, but for the same reasons that paper waivers fail – poorly written or against public policy.
Federal Statutes passed in 2000 defined the use of and legality of electronic contacts and “electronic signatures.” The E-SIGN statute, in effect, legalized the use of electronic and online waivers. The statute stated that a
. . . signature, contract, or other record relating to such transaction may not be denied legal effect, validity, or enforceability solely because it is in electronic form; and a contract relating to such transaction may not be denied legal effect, validity, or enforceability solely because an electronic signature or electronic record was used in its formation. 15 U.S.C. § 7001 (a) (1) & (2)
The use of an “electronic signature” defined as “an electronic sound, symbol, or process, attached to or logically associated with a contract or other record and executed or adopted by a person with the intent to sign the record” was also addressed. 15 U.S.C. § 7006 (5) So, when a client is asked to click on a box in order to agree to accept the terms of the waiver, the client is, in effect, signing a binding contract.
It is important that a defendant relying on an electronic or online waiver be able to verify that the plaintiff electronically consented to the waiver. One way to do that is by use of a system referred to as a “click-wrap” agreement. This is an agreement (containing a waiver of liability in our case) completed either online or on a computer at the business. The client is required “to affirmatively click a box on the website acknowledging awareness of and agreement to the terms of the waiver before he or she is allowed to proceed with further utilization of the website or complete the registration process.”
The following are five recent electronic or online waiver cases in which the click-wrap process was used. The ruling of each court indicated that the court was convinced that the plaintiff had agreed to the waiver. In some, the process is described in detail.
In a New York case (O’Connell v. Macy’s Corporate Services, Inc., 2016), Macy’s and the company (VGD) hired to administer Macy’s electronic online waivers submitted detailed depositions describing the multiple layers of security used to ensure that each client has signed their electronic online waiver. They testified that the online registration/application (a click-wrap agreement) to participate in the parade was a linear step-by-step through process wherein the applicant cannot advance to the next step/page without first completing all of the required elements of each prior step/page. The steps were: 1) that the initial state of the Waiver step/page is generic in nature, with a blank name field; 2) the full text of the Waiver is prominently displayed on the applicant’s screen, including a “bold headline” explicitly identifying the document as a “release”; 3) that in order for the applicant to proceed to the next step in the application, the applicant must first enter their name in the provided field of the Waiver; 4) then must check a box confirming their understanding and acceptance of the terms as described in the Waiver; and 5) upon the applicant’s advance from the Waiver to the next screen, a PDF of the Waiver is generated and saved within the server’s file system. When requested by the court, the defendant was able to produce sample screen shots showing it was impossible to register without signing the waiver.
NY CLS State Technology Law sec. 304  states that an “electronic signature” (a sound or symbol used by a person to show intent to sign the record) may be used by a person in lieu of a signature affixed by hand. Additionally, it states that
. . . even where an electronic writing includes a printed name as opposed to an “electronic signature,” a printed name on an electronic document will be treated as a signature where the record supports the conclusion that the Plaintiff in effect signed the electronic document. Specifically, if there is some indication that the author purposefully added their name to the electronic document it can be treated as a consent.
A waiver was enforced by a Colorado court without the waiver or screen shots of the process; affidavit testimony provided by an employee of USA Hockey that the plaintiff could not have registered for the event online without signing the waiver proved adequate for the court. In Berenson v. USA Hockey, Inc. (2013), the court was required to answer a question of emerging relevance in contract law – to determine what type evidence is required to prove that an individual has executed an exculpatory agreement during an online registration process. Berenson registered to play hockey on the USA Hockey website. To complete the registration, she had to insert initials on the webpage with the waiver of liability to signify her agreement to its terms. She then suffered an injury and filed suit. When USA Hockey was unable to provide the actual copy of the initialed waiver, she argued that Colorado’s best evidence rule prefers the original copy. However, the court stated that the rule is limited to cases in which the actual terms of the agreement are at issue. As a result, the court ruled there is no prohibition from using testimony by a witness having personal knowledge. The affidavit supplied by an employee of the defendant, based on personal knowledge of the process, explained the entire registration process, that Berenson did indeed register, and that she could not possibly have registered without having agreed to the waiver. Summary judgment for the defendant was affirmed.
A “click-wrap” waiver was used in an “Adult Swim Fun House Tour” case in West Virginia (Lutz v. Turner Broadcasting System, Inc., 2016). Everyone seeking to participate had to register for the event before entering the Funhouse: 1) Lutz had to stop at a registration table and show her driver’s license to confirm she was over 18; 2) stop at a second table where she used a computer to access registration and waiver forms; and 3) obtain a wrist band for entry. The waiver was upheld.
For the California House of Air (2016) trampoline center waiver, a new client upon entry advances to a computer station at which the client reviews an electronic waiver agreement – entering name, email address, and date of birth. The client then signs the agreement electronically (a copy of which is emailed to the client’s address). The client then proceeds to the reception desk at which a staff member confirms in the computer system that the client has signed the agreement. The staff member then issues a wrist band and a hand stamp to the client, thereby permitting entry to the trampoline area. On future visits, the client goes directly to the reception desk where a signed agreement is verified.
An electronic waiver was used in Locke v. Life Time Fitness, Inc. (2014). The Illinois court failed to enforce the health club waiver, but only because the offending risk was beyond the scope of the waiver. The court stated the fact that the waiver was displayed on a computer screen and the client signed on an electronic keyboard is insufficient to show the waiver is against public policy.
Other Electronic Waiver Cases
Kearney v. Okemo Limited Liability Company (2016), involved the use of a “click-wrap” ski waiver. The Vermont court stated that courts routinely enforce agreements of this type. It added that since click-wrap technology does not permit the client to continue on the site unless he or she clicks on the required box on the screen, courts have accepted proof of use at the site as evidence of the customer’s agreement. The ski waiver in this case was not enforced, not because it was an electronic or online waiver, but because waivers aimed at protecting ski resorts are generally against public policy in Vermont. Likewise, in another Vermont case (Littlejohn v. Timberquest Park at Magic, LLC, 2015), Littlejohn and his friend had purchased tickets for an adventure course on the Timberquest website, but claimed to learn of the waiver only upon arrival at the park. They were presented the document on a device and were instructed to read and sign it electronically. The court had some issues with the waiver, but had no problem with the fact that it was electronic.
Waivers were upheld in two Minnesota cases (Waltz v. Life Time Fitness, Inc., 2010; Bergin v. Wild Mountain, Inc., 2014). Waltz had signed an “electronic screened version” of the waiver that showed only page 2 of the form on the computer screen; he claimed he did not remember seeing or being shown the language of the waiver on page 1. The court noted that immediately above the signature line was a clear reference to the waiver provisions. In spite of this, Waltz never requested to see a full copy of the waiver prior to signing it. The court ruled that “if a party has the ability to read a written contract and fails to do so, the party is still bound.” In the Bergin case, Bergin’s friend, Knight purchased two season passes on the Internet. To complete the purchase, Knight agreed to a season pass agreement containing a waiver of liability. He did not ask Bergin’s permission for the waiver, but Bergin stated that he authorized the purchase. He had purchased passes in previous years and was aware of the waiver involved. The court enforced the waiver and the fact that it was electronic was not an issue.
At least three courts in Florida have dealt with electronic waivers. In Hinely v. Florida Motorcycle Training, Inc. (2011), a woman registered for a motorcycle training school on an Internet site, signing an electronic waiver of liability. She was injured during the training program. The waiver was enforced by the court without mention of the fact that it was an electronic waiver. In two Florida cases (Johnson v. Royal Caribbean Cruises, 2011; Magazine v. Royal Caribbean Cruises, LTD, 2014), cruise ship passengers signed electronic waivers for onboard activities. Both waivers ultimately failed, but in neither case was it because the waivers were electronic
In a 2013 Washington case (Johnson v. Spokane to Sandpoint, LLC), the court examined an online waiver to determine if it could protect the defendant. One complaint was lack of conspicuousness; the court listed several factors in determining if language is conspicuous. The court said the waiver was conspicuous in that it was set apart from the rest of document, was in italics or in capitals, had an informative title, and warned Johnson of the effect of the waiver. In a Massachusetts wrongful death case (Angelo v. USA Triathlon, 2014), the decedent renewed his membership and electronically signed a waiver and indemnity agreement. They were upheld regarding the ordinary negligence claim, but not against the gross negligence claim. Also, Massachusetts law enforces waivers requiring clicks on an online checkbox (Pazol v. Tough Mudder Incorporated, 2015).
Electronic waivers have the same status as paper waivers in courts of law – they protect in most states (those that enforce waivers) and do not protect in a few (those that do not enforce waivers). Several important points should be remembered. First, the waiver should be well-written – most waivers (paper or electronic) fail because they are poorly drafted. Secondly, the service provider relying on an electronic waiver should utilize a “click-wrap” system or an alternate system with which the provider can show that the client could not have registered without seeing and signing the waiver. Third, the acceptance opportunity should come at the end of the waiver and should be conspicuous and clear. Fourth, remember that waiver law varies from state to state; get help from someone experienced and informed on both sport/recreation waivers and your state waiver law. Fifth, and finally, understand that you may be called on in court to show beyond a doubt that a client cannot register for your activity or business without agreeing to the waiver.
Photo Credit: Thanks to Tim Patterson at Flickr.