One piece of paper could potentially save you from millions of dollars in liability—if that paper is a properly worded liability release (also called a “waiver”), and if the state at issue is one of dozens nationwide that have shown a willingness to enforce them.
Liability waivers are probably the most misunderstood contracts in the horse industry. Stables and equine professionals frequently pay little attention to these documents and instead rely on ill-founded assumptions that the documents are not worth the paper on which they are printed. Those who adopt this view are likely missing out on an important tool for avoiding liability.
What are Liability Releases?
Simply put, a liability release is a written agreement in which the signer—for himself and sometimes for others—agrees not to bring a claim or suit against someone else.
State laws vary greatly on whether these documents are enforceable and what language is needed within them. For example, a law in New York invalidates waivers and releases that are used by places of “public recreation or amusement.” Waivers used by trail ride providers in that state have not held up. In contrast, trail ride operators in states such as Colorado, Georgia, Illinois, Indiana, Michigan, North Carolina, Ohio, Tennessee, and Wyoming, with more favorable liability release laws, have successfully defended themselves against lawsuits.
Why Releases Fail
When liability releases fail in a legal challenge, the reasons generally fall into three categories:
1) faulty language. The most common reason for failure is faulty or incomplete language that doesn’t meet the legal requirements of a particular state. In a 1993 Ohio case, for example, the court found that the liability release failed to express the signer’s intent to release the stable from its own negligence “in terms that are clear and unequivocal.” Because the language within that stable’s release was missing key language, the case proceeded in court.
In an industry where equine business operators so often fail to pay close attention to their state law requirements, problems like this are likely to repeat on a consistent basis.
2) signing defects. In many states, minors are not bound by releases—regardless of who signs them. Most states require signees to be at least 18 years of age. Courts in Florida and Georgia have ruled that underage signers are not bound by the documents. Nationwide, states are divided on whether parents can legally waive the claims of their minor children.
Also, a few cases exist in which releases were not enforced because they were presented in the form of a sign-up sheet with a list of names. The persons signing them claimed they could not see the language above that released the stable from liability.
3) state law. Very few states (New York among them) have laws forbidding the use of liability releases. But that is not the only issue. In cases from Massachusetts and Idaho, unlicensed equine professionals could not rely on their liability releases to defend against lawsuits from customers because these professionals had failed to secure business licenses required by state law.
Stables interested in using liability releases should keep these ideas in mind:
• Get good advice. Before relying on a form document borrowed online or from another facility, make sure it applies to you and that it follows the current law in each state where you reside or do business.
• Store documents carefully. In a lawsuit this author worked on, a boarding stable in North Carolina discovered after being sued that the release it needed—the one that had been signed by the very person who was suing the stable—was mysteriously missing from the barn office. This author also defended a Tennessee case where a trail riding operation went out of business and destroyed all of its liability release forms—and then discovered it needed them. These examples illustrate the importance of storing liability releases in a secure location where clients have no access to them. Do not destroy them until you are certain, or a lawyer has advised you, that they are no longer needed.
• Don’t misrepresent the document. When presenting the release to the signer, don’t be afraid to tell your customers that the document is a release of liability. Give customers a chance to look it over and ask questions.
• One form can have lasting value. Only a small number of state laws require liability releases to be signed annually. Otherwise, if the document, by its terms, states that it is meant to be effective on the day of signing and in the future, the document very likely has an indefinite life.
• Use standard forms with great caution. Form releases are cheap, but they may violate your state law requirements. At best, these forms are a starting point from which an enforceable document can be drafted.
• liability insurance. Having a release does not eliminate the need for proper liability insurance. People who sign liability releases can, and sometimes do, bring lawsuits. When that happens, stables can use their liability releases in defense and ask the court to dismiss the case on the strength of the release. There is never an absolute guarantee that all courts will accept and enforce your document. If you go to court, whether you win or lose the battle, legal defense costs could be exorbitant.
Consequently, liability insurance is a stable’s safety net. It is designed to pay for your legal defense and (up to policy limits) settle a claim or pay any damages that you may be ordered to pay if you are sued by someone who has signed your release.
This article is not intended to constitute legal advice. Where questions arise based on specific situations, consult with a knowledgeable attorney.
Attorney Julie I. Fershtman has over 20 years experience and serves the horse industry. She is the author of two books on equine law and has drafted hundreds of contracts. For more information, visit www.equine law.net or www.equinelaw.info.