Managing Risks Through Releases

Businesses of all types use waivers and releases in an effort to eliminate liability to individuals for risks those individuals are exposed to during various activities. Contrary to common perception, such "exculpatory" agreements, wherein an individual waives or releases a future claim against the business in exchange for an opportunity to participate in a certain activity, are enforceable.

Two recent Indiana Court of Appeals decisions relating to participation/exculpatory releases remind us that prospective/exculpatory releases are 1) enforceable when properly drafted and continue to serve as a valuable risk management tool; and 2) subject to exacting scrutiny and narrow interpretation and must be carefully drafted.

In City of Hammond v. Plys, 893 N.E.2d 1 (Ind.App. 2008), the Court of Appeals reversed the trial court and upheld the validity of an exculpatory release signed by the plaintiff when she joined a fitness center. The Court highlighted the need under Indiana law for an exculpatory clause to both specifically and explicitly refer to the negligence of the party seeking the release from liability in order to be enforceable.

In Clay City Consolidated School Corp v. Timberman, 896 N.E.2d 1229 (Ind.App. 2008), the Court upheld a jury instruction in a wrongful death action that provided as a matter of law that the parents had not released the defendant school corporation from the school's own negligent acts because the release form did not "specifically and explicitly" refer to the negligent acts of the defendant (or in other words because the release did not specifically refer to negligence for which the defendant was being sued).

These cases serve as valuable reminders that releases should be reviewed prior to use and from time to time. If you would like more information concerning the enforceability of your organization's releases or waivers or would like to consider the use of such an exculpatory agreement, please contact Judy Okenfuss or Drew Miroff, members of Ice Miller's risk management practice.

This publication is intended for general information purposes only and does not and is not intended to constitute legal advice.  The reader must consult with legal counsel to determine how laws or decisions discussed herein apply to the reader's specific circumstances.