“Releases are not worth the paper they’re written on.” We hear statements like this all the time. Is this really true? Generally speaking, no. What is true, however, is that releases of liability (also called “waivers”) are probably the most misunderstood contracts in the entire horse industry.

Part One of this two-part series will begin by exploring the three main reasons why releases of liability have been known to fail over the years. Part Two will provide some suggestions for helping to make a release more likely to be enforced.

Reason For Failure Number One:
The Applicable State’s Law Makes Releases Invalid
The vast majority of states nationwide will enforce releases of liability. This fact surprises many in the horse industry. Only a small number of states have laws on the books that invalidate releases used in equine, sporting, or recreational activities. In a very small number of those laws, professionals cannot use releases in an attempt to avoid liability in their activities.

Even in the many states that enforce releases, courts frequently (but not universally) recognize that people cannot release away the right to sue another for certain types of more serious wrongdoing, such as “gross negligence” or intentional misconduct.

Reason For Failure Number Two:
A Problem or Defect Was Found in the Release’s Wording
What is the most common reason why a release of liability fails? The problem mainly rests with ineffective language found in the document itself.

Those who have signed releases sometimes sue. Over the years, the lawsuits have asserted a variety of arguments. Occasionally, the signer will admit that he or she signed the release but will attack the document’s wording and legal sufficiency. Here are two examples of these kinds of challenges:

* In a 1993 lawsuit against an equestrian center in Ohio, the document was termed a “release” but failed to contain language in which the signer specifically and appropriately released the center from liability for its own negligence or legal liability. Instead, the participant seemed only to have released the center from liability for the consequences of the signer’s negligence.

* In another case, the release document contained a misstatement of fact (a statement that the facility had no liability insurance, when this was really not the case). The Court ruled that this misstatement prevented the stable from relying on the release.

In both cases, the releases could have been “worth the paper they were written on,” but the courts found them to be substandard and unenforceable. Certain form contracts as well as releases prepared without the involvement of knowledgeable counsel run the greatest risk of falling victim to these and other types of challenges.

Reason For Failure Number Three:
There Was Some Problem or Defect in the Manner in Which the Release Was Signed
Even the best-worded release could fail if there was some legally significant defect in the manner in which it was presented and signed. Over the years, for example, releases have failed when those signing them were under the influence of alcohol or drugs. Releases have also failed when signed only by someone under the legal age (in states that enforce releases, typically those at or over the age of 18 can legally sign them). Other cases exist in which people claimed they were deceived or defrauded into signing the release, or that they did not understand what they signed. Whether these claims succeed or fail depends on the law of the applicable state.

Conclusion
A release of liability is a very important legal document. Where allowed by law, it can be the most important contract the horse industry can use. Why? The release could have the powerful effect of requiring another to relinquish an otherwise valid lawsuit. For this reason, and in our litigious society, a release has the potential to save you from losing potentially millions of dollars.

Not surprisingly, when a release is subjected to a legal challenge, it is certain to receive very intense scrutiny. Every word in the document may be examined closely, as if placed under a microscope. The circumstances surrounding its execution could also be closely examined. Because this scrutiny is virtually guaranteed, do not take chances with your release. If you purchase form releases found in books or in stores, understand that they are, at best, a starting point, and make sure that they comply with legal requirements of your state.

Finally, remember that having a release is never a substitute for having good insurance. make sure that you have proper insurance for the horse-related activities you undertake.

This article does not constitute legal advice. When questions arise based on specific situations, contact a knowledgeable attorney.

Julie I. Fershtman, Esq.
About the Author

Foster Swift Collins & Smith PC
One Northwestern Plaza
28411 Northwestern Hwy., Ste. 500
Southfield, Michigan  48034

jfershtman@fosterswift.com 

www.equinelawblog.com | www.equinelaw.net

Why Do Liability Releases Sometimes Fail? (Part 1)

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