Publish date: 18 January 2023

Accidents can happen when we are having fun. Sadly, our headlines are dominated by tragic events that occur when things go wrong due to human or non-human failure or oversight – think helicopter crashes, tandem skydiving catastrophes and theme park tragedies.  

That’s why the use of waivers (otherwise known as contractual release clauses) by recreational service providers, tourism operators and even retailers and hospitality venues have become standard operating procedure for most. 

But how well do these waivers protect the business operator and the rights of customers and their families in the event of life changing injuries or death? 

No matter how watertight a waiver appears, the reality is that the defences made available under the Queensland Civil Liability Act 2002 for dangerous recreational activities and obvious and inherent risks provide a balance between the interests of business operators and the rights of their customers. In practice, waivers and contractual exclusions are effective in certain circumstances but will rarely preclude a deserving plaintiff from recovering compensation for negligently inflicted injury. 

How a waiver is drafted, explained and signed can have a significant bearing on whether that piece of paper will do the heavy lifting that was expected of it, or be totally ineffective when the worst-case scenario unfolds.  

When reviewing, dissecting and analysing the fine print of these waivers, what we often see are three weaknesses that make the contract not worth the paper it is written on: 

  1. Poor drafting 
  1. Improper implementation 
  1. Conflict with legislation. 

Poor drafting 

When courts interpret exclusion clauses they attribute ordinary meanings to the words and terms. So it’s important to know that vague, unclear or uncertain wording can go against the party that seeks to rely on it and in favour of the weaker party that needs protection.  

Poor drafting can also result in a conflict with State and Federal laws that can render the waiver void due to overreach. The Australian Consumer Law (Section 139A) limits liability exclusions in contracts for recreational services to “personal injury and death” only. Listing broader exclusions such as “injury, loss, damage, death, economic loss whatsoever” will render the waiver void, as seen in a recent case. 

Similarly, a contractual release clause will likely be struck down if it fails to fully explain or to properly identify the risks of the activity. 

Improper implementation 

Contract lawyers are taught early on that timing is critical for contractual efficacy. Adding in a contractual release clause after a contract has been entered into just will not fly in court. 

One well known example is the seminal decision handed down by the English courts in 1970 in Thornton v Shoe Lane Parking [1970] EWCA Civ 2. Because the car park operator displayed the liability exclusions at the exit to the car park, the court ruled that these terms were invalid as they had not been agreed to at the time the contract was formed – which was deemed to be when the customer took a ticket from the machine on entry. 

Similarly, there’s no point in a business operator accepting an online booking and payment and then asking a customer to sign a waiver form on the day of the activity – it will usually be way too late by then. 

How waivers are explained is also critical to their efficacy or otherwise – which can throw up plenty of challenges for business operators in terms of staff shortages and insufficient training. Simply put, customers need to know what they are signing and its implications. One instance that comes to mind is Lormine v Xuereb [2006] NSWCA 200, where a customer on a dolphin watching cruise was asked to tick a box and initial a form as a “head count” requirement, where in fact the form was a waiver. After being badly injured from a freak wave while sitting on the bow of the boat, the Plaintiff was successful in her claim both at trial and on appeal, despite having signed the document, as the nature of the form had been misrepresented by the tour operator. 

Conflict with legislation 

As mentioned above, the Australian Consumer Law (Sec 139A) provides that recreational service providers can limit their liability for personal injury or death only, not property or financial loss. 

For example, the Alameddine v Glenworth Valley Riding Pty Ltd [2015] NSWCA 210 case resulted in the waiver being struck down because it went further than excluding liability for injury or death, citing exclusions for “injury, loss, damage, death, economic loss whatsoever”. 

A waiver signed for or on behalf of someone under 18 is also problematic. Because a parent or guardian can only bind a minor to a contract where it is for their benefit, a contract containing exclusion clauses is unlikely to be seen as beneficial. The result is that the chances of a contractual waiver denying an injured child the opportunity to pursue compensation for a negligently inflicted injury, are generally slim indeed. 

In summary 

Waivers are an everyday feature of engaging in recreational services and facilities, but unless they are carefully crafted, expertly entered into and their terms consistent with State and Federal laws, they are unlikely to prevent a deserving plaintiff succeeding in their claim. 

As published in My Weekly Preview, Lawyers Weekly and Australian Lawyers Alliance 

Travis Schultz
Travis Schultz
Managing Partner
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