Exculpatory contract waiver

On Jul 3, 7:19 am, dr_phill...@yahoo.com wrote:
> Most average Joe's are used to signing off on waivers and contracts
> they never read. Most of these waivers are basically full of legalese
> freeing the company of any liability for it's product or service. Do
> these waivers really hold any water in court, or does common sense
> always take precedence.

Coming late to this thread, I only have a few points to add to others' worthwhile comments.  First, most if not all USA states adhere to the "objective theory" of contract formation.  That is, whether Joe Contractor read the contract he was signing or not, or understood it or not, he will be held to the standard of what a hypothetical "reasonable person" would have done, and understood, in the circumstances.  It doesn't matter what Joe subjectively thought the contract meant; all that matters is its reasonable, objective meaning, and the fact that he signed it indicating his agreement to those terms.   If that's "common sense", then yes, it takes precedence.

> For example , say your sky diving instructor was drunk and injures you
> in a bad landing. Is he and his company completely free of any
> wrongdoing because of the 12 page waiver you signed before jumping?

It does make a difference what kind of subject matter the contract involves.  For skydiving, yes, the court is likely to uphold an exculpatory agreement where the customer agrees to hold the operator harmless if he gets injured.  In some states, including MD, such agreements do not apply to waive the negligence of the operator unless the contract specifically and clearly says it applies to the operator's negligence.   And in no state I'm aware of will such a contract exonerate the operator from gross negligence, recklessness, or intentional battery.

If the contract is for something other than a dangerous, optional and voluntary recreational activity like scuba, skiing, motor racing, airshows (we had a thread on this not long ago), the courts are less likely to find such a term reasonable and more likely to find oppression or duress.   Frex, no state I'm aware of will allow a hospital to force an ER patient to sign a waiver of liability as a condition of being examined and treated; that would be duress because the ER patient has no realistic choice and needs the services immediately.   Ditto with contracts for public utilities, common carriers and other vital necessities of life.  However, even those kind of businesses have been chipping away at the advances in consumer rights of the late 20th cent. as the conservative forces of deregulation and globalization have come to the forefront in everyday life.   If the consumer has 5 electric suppliers to choose from (supposedly) none of them have monopoly power and he not only gets great rates but any exculpatory clause in the contract will be considered fairly bargained for, and thus more likely to be upheld.
 
> On a similar note, why don't most businesses add these limitation of
> liability clauses to their contracts?

Many do.

> If a prospect feels they have a
> legal right to your hard earned money because of a common mistake,
> then just don't sign that prospect on.

If you the business are not a public utility bound to offer your services to all takers, you do have that option.

> I run my own small software
> service company and just plainly refuse my services to any prospect
> who questions why I have all 'Limitation of liability' clauses in my
> contracts.

Or you could explain to them why.   And not lose their business unnecessarily.   But that's your choice.
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