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If a Business Has a Release Form, Does that Mean It Can Never Be Sued?

Release forms or "hold harmless" agreements are used by a variety of businesses, in an attempt to limit (or release altogether) the business's liability if a customer is injured on the business's premises, or as a result of the business's services. In some contexts, a release agreement will use language to indicate that the person signing the agreement has "assumed the risk" of being injured.

For example, a horse stable may require that all people wishing to ride the stable's horses sign a release form acknowledging the risks involved in riding, and agreeing that the stable will not be liable if the customer is injured while riding. Or let's say you are participating in a charity bike ride. The charity may include a hold "harmless clause" in its contract to prevent the participants from suing if they are injured in the course of cycling. Essentially, this clause would require the cyclist to accept all risks associated with the activity, including the risks of injury or death.

When it comes to liability for a personal injury, release forms can significantly alter the legal relationship between a customer and a business. Generally speaking, however, most states do not enforce releases where the business is alleged to have been grossly negligent or engaged in intentional misconduct.

Release Form Language to be Avoided

A release is essentially a contract that attempts to excuse a business, for injuries to a person that arise out of the foreseeable and unenforceable risks in an activity. In order to make sure your business is legally protected, you'll need a well-drafted document.

Here are some common pitfalls that should be avoided:

  • Avoid unclear or ambiguous language. Legal jargon should be avoided whenever possible.
  • Avoid small print. Make sure the contractual language is large and easy to read.
  • Avoid commingling your release on the same page with another release form.

Release Form Enforceability

There are more subtle legal issues though, when it comes to whether or not a release will be enforced. A minor usually cannot legally release his or her rights. Only the minor's parent or guardian can do so. So, a release signed only by the minor is not enforceable. In addition, the release must be signed before any injury has occurred. A business that allows a customer to sign a release "later" may be unpleasantly surprised when an injury occurs before the customer ever gets around to signing the release.

Release Form Concerns

Many businesses use "fill in the blanks" forms for their releases. It is important that the blanks are filled in before the release is signed. Filling in the blanks later adds material terms to the release that the signor can claim he or she did not agree to at the time the release was signed.

Another important concern is keeping the release where it can be located later. If a customer signs a release but does not sue for injuries until years later, the release is only useful if it can be produced for the court. If the release has been lost, the business may face liability that could have been avoided.

Legal Advice for Your Drafting Release Forms

Whether you are thinking of using "fill in the blanks" forms and are concerned about material terms, or trying to redraft your company's legally enforceable release form, a good first step is to seek legal counsel. An experienced business and commercial law attorney can design a release form specific to your business.

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Contact a qualified business attorney to help you navigate business liability and insurance issues.

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