Waivers of Liability

Author: erik-compton posted in: Commercial + Personal Injury

We live in a world of liability. Parents are hesitant to allow their child’s friends jump on their trampoline, schools are canceling educational travel opportunities, and business owners are thinking twice before hosting annual Christmas parties—all for fear they’ll be held liable for any injury that may result.

The Supreme Court of Canada has approved the use of “waivers of liability” to counteract such concerns in the commercial sphere. These waivers can reduce or exclude entirely the parents, schools or businesses liability for the injury of the signer.[1] These parties are sometimes called the “drafter’s” because they are the ones who are drafting the agreement for signature by the weaker party.

However, not all waivers of liability are enforceable. In Tercon[2] and other cases, the courts have revealed different ways in which an exclusion clause may be inapplicable or invalid. For instance, a waiver of liability may not protect the drafter simply because its language does not apply to the circumstances of the injury[3]. For example, if a customer signed a waiver that excluded the business from liability for injury before renting a dirt-bike, but the waiver only applied to injury that occurred while the customer was riding an ATV, the drafter may still be liable if the customer became injured. The trick to producing a good exclusion clause to use language that is both specific as to the applicable circumstances and covers a broad range of factual scenarios and claim types.

A waiver of liability clause may also be invalid in several other circumstances: when the drafter is negligent in their duty of care to the signer;[4] when the drafter uses a superior position of power to coerce the other party to sign;[5] or when the drafter uses the waiver of liability to do great harm to the signatory and/or public.[6]

From these points, we can learn a few lessons. First, the drafter should always make every effort to not be negligent, even if the customer has signed a waiver of liability. Second, the drafter should never force a customer to sign an exclusion clause. And third, a drafter cannot rely on an exclusion clause in such a way that results in severe public harm.[7]

A waiver of liability may also be invalid for what is referred to in law as “lack of notice.” If the drafter has reason to suspect the signatory does not understand the contents of what they are signing, the drafter may have a duty to describe the contents of the waiver to the signatory.[8] This duty arises in more day-to-day transactions—for example when a tour-guide asks her customers to sign a waiver of liability.

If your business involves customers taking part in risky activities, drafting or revisiting your waiver of liability agreement is highly recommended! If you have any questions about waivers of liability and are interested in having our firm draft you an agreement to cover all your specific risks, please contact us at KMSC Law.

[1] BG Checo International Ltd. v. British Columbia Hydro and Power Authority [1993 1 SCR 12].

[2] Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), [20101 1 S.C.R. 69].

[3] Ibid para 122.

[4] Bloor Italian Gifts Limited et al. V Dixon et al. [2000 ONCA 760] para 39.

[5] Tercon, supra note 2, para 122.

[6] Ibid para 123.

[7] Ibid.

[8] Karrol v Silver Star Mountain Resorts Ltd. [BCSC 1988] para 4.