Businesses that conduct hazardous activities (skydiving, heli-skiing, etc.) face a perennial question: How to protect the business from lawsuits from customers in light of the fact that the activity has inherent dangers.
There is no contract or form that can guarantee that a business will avoid liability. At the end of the day, if an accident happens and a customer sues the business, the release will be presented to a judge (or in some states, a jury), who will make the threshold determination as to whether the customer really and truly intended to release the business for anything that went wrong. The judge will ask questions of the customer. Did the customer really understand what he or she was signing? Were they in their right mind when they signed the release? Were they pressured to do it? Did someone from the business help explain the release? One can see that a skilled plaintiff’s lawyer can poke a hole in a release, especially where the release is not well drafted.
That said, here are the best practices for a release. By following these steps, a business is more likely to have a release that survives a lawsuit.
(1). Have the release be separate from the contract for services. When a business is conducting a hazardous operation, there are two transactions occurring. First, the business is agreeing to perform a service in exchange for the customer paying x-price. Second, the customer is agreeing to release the business if something goes wrong, in exchange for the business offering a better price. Break the two concepts into two separate documents.
(2). Write the release in plain English. Consider the following release:
“…the aforementioned Customer hereby releases, discharges and acquits forever and ever said Business from any and all claims, liabilities, causes of action now accruing…”
No one speaks King’s English anymore. It is not as powerful or clear as normal, everyday language. Write it in plain English:
“By signing this Release, you agree to never sue the heli-skiing operator. That goes for you, the Customer. It also bars your spouse, domestic partner, or children from suing us if you die in a heli-skiing accident.”
It’s more clear. Just say what you mean and write the document as if you were explaining it to a customer.
(3). Address Liability. The release needs to waive liability. If the business’s pilot does something wrong during the operation, there is a good chance that the business made a mistake. Suppose the helicopter hits the mountain. The NTSB crash investigation determines that it was CFIT due to glare, and that the pilot didn’t have the nose of the helicopter pointed the right direction. In that case, the pilot made an error, and the business was negligent. Negligent businesses are usually liable. Thus, the address should address liability. Sample language:
You, the Customer, are waiving liability. What that means is that, if the pilot makes a mistake and your leg gets chopped off because of that mistake, you will not sue the Business. By signing this release, you agree that you will not sue the Business, even if the Business screwed it up.
(4). Address Damages. Sometimes a court will not enforce the liability waiver. For example, if the pilot was extremely reckless, the release will not work to waive liability. In that case, the fall-back is to have a waiver of damages, whereby the customer agrees that its damages are limited to x-dollars. The basic idea.
The Business has purchased an insurance policy that will provide you, the Customer, with up to $_________ in the event that you are injured. By signing this Release, you agree that those proceeds are the only sums you will receive in the event of an accident. You agree to waive any and all other damages, and that the insurance proceeds are the entirety of what you will receive.
(5). Indemnity. Indemnity clauses are tricky. The idea is that, if a third person sues the business, the Customer will foot the bill for the defense of the suit. Good luck with that – the customer might not have the means to do that. There are two things that an indemnity clause should say (and this is the one instance in which King’s English is probably required). First, the agreement should have the words “defend, indemnify, and hold harmless.” As an example, “Customer will defend, indemnify and hold harmless business from and against any and all claims, suits, causes of action….” Second, it should be broad and relate to any activity: “…arising out of the relationship and activities engaged in between Customer and Business…” We don’t want the indemnity to be related only to Business’s negligence. It needs to be related to all activities.
(6). Say in the release those things you would tell your kid if he/she were to do this activity. The key here is the warning. You need to warn the customer and give that person a chance to get out of this deal now. Sample language.
Heli-skiiing is seen as being an “ultra hazardous activity.” We will do our best to make it as safe as possible, but there is no way to guarantee that a bad outcome won’t happen. You might be permanently disabled. You might die.
We have to have you sign this Release if you are going to engage in heli-skiing. There is no way that we can operate as a business if our customers don’t release us from liability and damages. That is why we require this release to be signed.
BEFORE YOU SIGN THIS RELEASE, STOP AND THINK ABOUT WHAT YOU ARE ABOUT TO DO!!! By signing this release, you agree on behalf of yourself and your loved ones that you cannot sue the Business, and that the only money that you might receive are the insurance proceeds. IF AFTER THINKING ABOUT IT YOU DON’T WANT TO DO IT, THEN PLEASE RETURN TO THE FRONT DESK AND RECEIVE YOUR MONEY BACK.
If, as a thinking, consenting adult, you decide that you want to have the experience of heli-skiing, then lets do this operation together. Follow the instructions of our staff for this to be as safe of an operation as possible. Let’s work together to have a great experience for you and us, while knowing full well what the risks are.
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Conclusion. There are no magic words to a release. But by adding the above principles, you have a better chance of having an enforceable release that is kept intact by a court of law.