Releases/Waivers of Liability

By Richard Rooney, J.D.

The basics of tort liability

Negligence is a fundamental component of the common law system. Negligence is based upon duties that the law imposes on individuals. Some duties are tied to relationships between individuals–for example, a landlord has certain duties to tenants of his/her property. Additionally, every individual “owes” a general duty to be “reasonably prudent” in his or her actions.
If someone fails to discharge an owed duty and another is harmed as a result, the person owing the duty may be liable for the resulting harm. As an example, if you are cutting down a tree and aren’t careful to make sure nobody is around and part of the tree falls on a passerby, you are liable for the harm the tree caused to that person.

What are releases and why do we need them?

Some activities and locations are inherently risky to people and injury is a foreseeable or even likely consequence. If people had to constantly worry about the looming threat of legal actions, many beneficial experiences couldn’t be organized or promoted. Businesses want some assurances that they are limiting their exposure to lawsuits as they go about their business–particularly in the recreation and fitness business areas.
Thankfully, there are contractual releases of liability for just such activities. Go to any business establishment that sells fitness related services and you will likely be asked to sign such a release.
These agreements are called waivers, releases, or exculpatory agreements. What they actually are is a contract agreeing that the signing party cannot sue for reasons stated in the release in exchange for being allowed to participate in the risky activity.

When are releases valid?

How valid are such agreements? In Michigan, releases will be upheld under most conditions. The courts have reviewed challenges to releases.  In general, as long as the party granting a release has the capacity to enter into a contract, the parties agreed to the release fairly and knowingly and in exchange for some benefit, and the release is clear enough to not mislead the parties, releases have been upheld. So releases that are among adults, and not overreaching, are typically valid.

When releases aren’t valid.

Releases can be broad as long as they are clear enough for the person signing them to know to what they are agreeing. But releases cannot be ambiguous or misleading. And releases that seem to cover “gross negligence” on the part of a party, typically cannot withstand court scrutiny.
Also, because releases are contracts, releases signed on or for minors will generally not be enforceable. Minors lack the legal capacity to contract and parents/guardians lack the legal capacity to completely bind children in their care to contract.

What does this all mean?

To sum things up, in Michigan there are a few things to consider when evaluating a release’s validity:

• Does the person signing have legal capacity? (Is the person a minor, intoxicated, or incapacitated?) If the person lacks capacity the waiver can be challenged on those grounds.
• Does the waiver completely cover the subject matter intended? If the waiver is too narrow, it might still leave liability gaps.
• Is the waiver clear enough for the person signing to understand what he/she is waiving? If the waiver is confusing, ambiguous, or misleading, a court might find it invalid.
• Should minors or their parents sign waivers notwithstanding their unenforceability? While a parent cannot bind minors to contracts, signing a waiver may dissuade people from bringing a suit. If a minor signs directly, the waiver could be affirmed upon the minor reaching age 18.

Affirmation of a contract can occur by actions, meaning if the minor continued to participate the waiver would become valid. The widest legal cover possible under these circumstances (outside of barring minors from the activity), would be to have both the minor and guardian sign.
 
If you’d like help with releases or other parts of your fitness business or operations, please feel free to contact our firm.  We are conveniently located at 912 Charlevoix Drive, Ste. 120, Grand Ledge MI 48837.  Our telephone number is 517 853-8015.