Why Do I Need a Waiver?

If your business offers extreme sports or risky activities, you probably have an inkling that you will need a waiver. A waiver form is a concise document that outlines the activity and risk involved. It usually states that, if the waiver is signed, the participant will not bring a claim against you. It is an agreement between you, as the activity provider, and your participants in the activity. This article sets out:

• the situations in which using a waiver will be appropriate;
• the elements of a waiver; and
• tips to keep in mind when implementing a waiver.

When Should You Not Use a Waiver?

A waiver may not always be the appropriate contract to have in place between you and your customers. If you are a business that engages paying customers, where you are providing goods or services to them for a fee, it is likely that your terms and conditions will be the appropriate agreement. You should then incorporate a relevant waiver clause, which may be in the form of:

• a waiver and release;
• a limitation or exclusion of liability clause; and/or
• an indemnity clause.  

When Should You Use a Waiver?

A waiver is not a commercial contract in the same way your terms and conditions is. Rather, it is a document in which your customer accepts responsibility for the risks that may be involved in purchasing, using or engaging in the goods or services that you provide. Effectively, your customer promises not to sue you if something goes wrong. A waiver is often used in the case of one-off participation in an activity.

Therefore, you need a waiver if:

• your participant is engaging in a dangerous or risky activity (for example, extreme sports);
• your participant is testing a new product on the market; or  
• you are using your client’s personal or identifying information, usually in the form of videos or photographs, for promotions and marketing. If you are a photographer who wants to use the footage you have taken of your customer for marketing purposes, a model release form will be appropriate. 

You need a waiver if your participant will be participating in:

• martial arts;
• gymnastics;
• bubble soccer;
• laser tag;
• paintball;
• extreme sports, such as motorbike riding, bungee jumping or skydiving; or
• jumping castles.

This list is certainly not exhaustive. If there is any risk to your participants when they undertake the activity your business offers, you need a waiver. They need to sign it before starting the activity.

Elements of a Waiver

Certain elements should be included in your waiver to ensure your business is adequately protected:

1. the waiver must be incorporated into a legally binding and enforceable contract;  
2. the waiver should contain an adequate risk warning or disclaimer, which clearly explains the risks that your participants will be assuming. It should contain relevant clauses that waive and release you from liability and should be clear and unambiguous about the liabilities you intend to exclude yourself from (particularly where you intend to exclude yourself from liability for negligence);
3. your waiver may also include an indemnity, whereby the participant agrees to compensate you for and against any loss or damage the participant or you suffers or incurs because of the participant’s use or participation in your goods or services; and
4. the disclaimer, waiver, release and indemnity provisions need to be brought to the attention of your participants. You will need to take extra steps where the waiver contains particularly unusual, onerous or unreasonable clauses or where the goods or services expose your participant to a particularly high level of risk.   

Tips for Implementing a Waiver

Even if a participant signs a waiver, this does not necessarily mean they cannot or will not bring a claim against you. Accordingly, whether a waiver will protect your business largely depends on whether:

• it is legally enforceable;
• it contains all necessary protections (i.e. is it properly drafted?); and
• you provided your participant with adequate warnings of the risks involved and your intention to exclude yourself from responsibility.  

In addition, your participants are likely to have legal rights or entitlements against you that you cannot exclude in your contract.  

For example, under the Australian Consumer Law (ACL), if you are providing goods to your participants, you have an obligation to ensure the goods are, among other things, safe and fit for purpose.  

Where you are providing services, you have an obligation to ensure:

• you provide those services with acceptable care and skill;
• you take all necessary steps to avoid loss and damage; and
• the services are fit for purpose.

You cannot exclude these implied terms in your contract. Additionally, the ACL and other laws may also operate to protect participants where provisions in your waiver are arguably:

• harsh;
• unfair;
• unconscionable; or
• oppressive.  

Key Takeaways

If you are a business that offers potentially risky goods or services to paying or non-paying participants, you need a waiver. However, a waiver by itself is not a commercial contract like your terms and conditions is. Therefore, to be enforceable, your waiver needs to be part of a legally enforceable contract. If you are unsure whether your business needs to implement a waiver, or need help drafting a legally enforceable waiver, contact LegalVision’s contract lawyers on 1300 544 755 or fill out the form on this page.