Disclaimers are a legal necessity for any business carrying out outdoor activities that place consumers and property at risk. If you run an outdoor adventure and are unsure what your disclaimer should include, this article can give you a good start on your legal obligations.
What is a ‘Disclaimer’?
A Disclaimer is a statement that purports to limit the liability of an entity should damage or loss occur. These can also be referred to as an Exclusion Clause. Disclaimers are included in a contract to diminish and maybe even exclude the rights of a party to the contract. For example, dry cleaners often deny liability for unforeseen damage to clothing that may occur in the dry cleaning process. They will make their disclaimer known to you either by informing you or making reasonable efforts to bring it to your notice. You form a contract with the dry cleaner and accept this term of the contract, when you drop off your clothing, pay the fee and collect a ticket.
Unsurprisingly, disclaimers are important in a commercial context. However, a business owner cannot include any and everything that may occur to them in their Disclaimer, including proprietors of outdoor adventure schools. In your context, the Australian Consumer Law and the Law of Tort (specifically, negligence) will affect the contents of your Disclaimer.
Australian Consumer Law
The Australian Consumer Law (ACL) became operational in 2011. The principal purpose of the ACL is to protect consumers. It is enforced most publicly by the Australian Competition and Consumer Commission (ACCC).
Running an outdoor adventure school and supplying a service to consumers means that the ACL applies to your business and affects what you may put in your disclaimer.
In brief, the ACL includes four guarantees for consumers of services:
- The supplier guarantees due care and skill;
- The supplier guarantees the reasonable fitness of the service for its particular purpose;
- The supplier guarantees that the service will be of such a nature and quality as might reasonably be expected to achieve any result that the consumer made known; and
- The supplier guarantees supply within a reasonable time if no set time is specified.
Effect on your Disclaimer
The ACL, including the guarantees above, will restrict the contents of your Disclaimer. Keep the following points at the forefront of your mind when you draft the disclaimer:
- It cannot exclude the operation of the consumer guarantees regimes of the ACL (including the rights of consumers). That means you cannot expressly exclude liability for breaching a consumer guarantee;
- It cannot include a provision that would have the effect of excluding the operation of the consumer guarantees regime of the ACL;
- It cannot limit your liability which would limit the operation of the consumer guarantees regime of the ACL (including the rights of Consumers); and
- It cannot have the effect of limiting your liability which would limit the operation of the consumer guarantees regime of the ACL (including the rights of Consumers).
Of course, you know your business best. Your disclaimer should reflect your needs. Nonetheless, the points above provide guidance as to what you are unable to do.
Further information about the ACL is on the ACCC website. However, be sure to get expert advice in drafting your Disclaimer. A professional who understand the ACL and your business needs can write a Disclaimer that protects your business and complies with the ACL.
Tort Law – Negligence
Your business and your Disclaimer are also affected by the Law of Negligence. As the business owner you will have a duty of care to your customers. You must avoid harm coming to them by doing or not doing something that you should know will cause them damage or loss.
Effect on Disclaimer
When it comes to drafting a disclaimer the rule is to be very specific. Make it clear that you are excluding liability for negligence. Use the word negligence. As with all legal documents, make sure it is simply written and easy to understand.
Effective business procedures might also make your Disclaimer more robust to potential scrutiny. Ensure your customers know about it before any activity commences. Have them physically sign it.
In your case, the possible impact of the law of negligence may be affected by statutes limiting liability. In turn, this might affect your Disclaimer. For example, in NSW the Civil Liability Act 2002 (NSW) (CLA) limits liability for negligence for warnings about obvious risks in dangerous recreational activities. In the event of legal action, your business would need to prove that your activities are dangerous recreational activities and that the risk was obvious. To date, judicial interpretation of the CLA has set a high threshold for both these categories. Other Australian jurisdictions have similar legislation. Be sure to consult a lawyer. Ask them to draft a Disclaimer that protects your business as much as possible. Contact LegalVision’s employment lawyers to assist you. Questions? Call us on 1300 544 755.
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