Exclusion clauses, disclaimers and waiver forms seek to limit one party’s liability to another. A party will often rely on them when something goes wrong, for example, when a dry cleaner shrinks a dress. Whether or not they are enforceable will depend on a number of considerations. This article explores the difference between exclusion clauses, disclaimers and waiver forms.
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Exclusion Clauses in Contracts
Exclusion clauses aim to limit one or both parties’ liability in one manner or another. For example, the clause might:
- exclude liability on the happening of certain events; or
- limit the amount payable by a party for loss or damage that arises from that particular agreement.
To be enforceable, you should incorporate an exclusion clause into a written agreement and have all parties sign it. If the agreement is valid and the terms of the clause are not unfair, courts will typically enforce exclusion clauses, as the parties agreed to be bound by the terms of the agreement.
Disclaimers
It is common for providers of goods or services to try to limit their liability by putting a notice or disclaimer. For example, a business might put up a sign saying they are not liable for certain kinds of loss or damage. In these circumstances, there is no written agreement between the parties. As such, for the disclaimer of liability to be enforceable, the party relying on the disclaimer must show that they took reasonable steps to give notice of the disclaimer to the other party. Likewise, they must provide this notice before or at the time of entering the contract. In other words, providing notice of the disclaimer once a party has bought and paid for a service will unlikely be considered as having given reasonable notice to the other party.
Continue reading this article below the formWaiver Forms
A waiver is a legally binding document that releases one party from liability and other obligations to the extent set out in the form. These are different from a commercial contract (for example, customer terms and conditions) which would have an indemnity, limitation of liability and waiver and release clauses.
A waiver is often once-off document where the party accepts responsibility for the risks that may be involved in an activity, such as:
- skydiving (recreational activities); or
- participation in testing a new product.
A waiver form needs to be part of a legally binding and enforceable contract. It follows that you must clearly explain (preferably with examples) the risks that the other party is taking when conducting an activity. Likewise, you need to clearly explain the liabilities you are excluding. The party undertaking the risk should have sufficient time to read and understand the waiver and risks before signing it.
Waivers and the Australian Consumer Law
Notably, a waiver cannot exclude someone’s rights under the Australian Consumer Law (ACL). However, certain legislation, including the ACL, sets out what obligations you can exclude if those obligations concern the supply of recreational services:
- Trade Practices Amendment (Liability for Recreational Services) Act 2002 (Cth);
- Civil Liability Act 2002 (NSW); and
- Civil liability law in other States and Territories.
For recreational services, you can exclude only certain kinds of liability; in some circumstances, your waiver may not be enforceable. For example, where a person suffered personal injury due to the reckless conduct of the supplier of the recreational activity, you cannot limit your liability.
When considering whether a service provider has breached their duty of care, negligence and misconduct are key factors that a court will take into account. In New South Wales, an exclusion of liability concerning certain liabilities will not be enforceable if the harm was due to a breach of law that provides for specific procedures for protecting personal safety.
Key Takeaways
Exclusion clauses, disclaimers, and waivers may or may not always be enforceable, depending on a variety of factors. It is best to seek legal advice before trying to rely on the protection that they may provide. You can find some of these limitation clauses within written business contracts. Others will be in the form of a sign, commonly used for disclaimers.
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Frequently Asked Questions
Waiver forms are often difficult to enforce because they need to exclude only certain kinds of liability. Likewise, you can only rely on them in certain circumstances. Therefore, it is always best to get legal advice before trying to rely on a waiver.
This will depend on several factors. The party who wants to rely on it must show that they took reasonable steps that were reasonably sufficient in the circumstances to give notice of the disclaimer to the other party. Likewise, notice must be given to the other party if the exclusion is harsh or unreasonable.
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