A waiver of liability is an excellent tool to protect your company from litigation. However, not all waivers are enforceable and a drafter must be aware of the legal requirements in order to be successful in preventing a lawsuit. We recently obtain a dismissal on behalf of a client, who had obtained a waiver of liability from the plaintiff. The plaintiff had serious injuries and our client was exposed to a potentially significant judgment in the event a lawsuit was allowed to proceed. By preparing a proper waiver, our client was able to limit its exposure and put an end to the claims brought against it.
Thus, we now turn to what is required in order for an exculpatory clause to be valid. Under Illinois law, an exculpatory clauses in contracts, though disfavored, and construed against the drafter, are enforceable if: (1) the agreement clearly spells out the intention of the parties; (2) there is nothing in the social relationship between the parties militating against enforcement; and (3) it is not against public policy. Evans v. Lima Lima Flight Team, Inc., 373 Ill.App.3d 407 (1st Dist. 2007).
To better understand the implications of the above principles, we must look to Illinois case law that has analyzed whether a waiver of liability is enforceable:
The take away from the cases is that the waiver must clearly spell out the intention of the parties and the injury must have been a foreseeable consequence of participating in the activity that required the waiver. If done properly, a waiver can limit your exposure to a lawsuit.