Contrary to urban myth, waivers and releases of liability can be highly effective risk management tools. Without such tools many entities could not afford to provide the programs that they offer. However, exculpatory agreements are not a panacea for managing risk – some of their limits include:
The above notwithstanding, adults are generally free to enter into reasonable contracts that release another party of ordinary negligence (waivers of liability for gross negligence or intentional acts are unenforceable). If children are involved, that freedom is significantly more restrictive.
Children’s parents normally have the right to enter into contracts on behalf of their children as a part of their freedom to raise their children without excessive governmental interference. However, that freedom does not extend to anything which may impair a child’s best interests or rights when he or she reaches majority, especially if it involves injuries that resulted from participation in a commercial activity.
In most jurisdictions where the courts that have addressed this issue a differentiation is made between waivers used in commercial activities and waivers used in school-run or community-sponsored activities. The reasoning given is that disallowing exculpatory agreements for the latter groups may be contrary to the public interest by prohibitively increasing the cost of the services these public and non-profit entities provide.
So what differentiates the two? In general a commercial activity is one where the provider offers a product or service primarily for its own benefit or profit; a community-sponsored activity is one where a governmental or non-profit entity offers a product or service primarily for the benefit of the recipient. This is not to say that a for-profit entity could not offer a community-sponsored activity or that a non-profit could not be involved in a commercial activity. A YMCA program that generates revenues for other benefactors or programs, for example fitness memberships, might be considered commercial if considered alone instead of within the context of all that the entity does.
The real crux of this issue is whether the specific YMCA activity under consideration is ultimately determined to be community-sponsored or commercial. It is true that there is no guarantee that an exculpatory waiver will be upheld for the former, but it almost certainly will not be upheld for the latter. There is insufficient precedent to determine how the court will be decided in any given instance. The answer may vary jurisdiction-to-jurisdiction and case-to-case.
Exculpatory agreements relating to children still have value even though the law is still unsettled in this area:
However, a waiver is never a guarantee against loss. A waiver may help protect a YMCA from liability but it is no substitute for aggressive risk management. The best thing to do – for the YMCA and for its members – is to work diligently to keep members, guests and staff safe.
Please call us at 800-463-8546 to discuss this or any other risk management safety tip, or visit our web site at www.redwoodsgroup.com to learn more about YMCA risk management issues.