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Liability waivers: If in doubt, get a new one

Liability waiversLiability waivers are a must for any company inviting members of the public to engage in a risky activity. While no waiver should be considered ironclad, a well-drafted waiver will often provide some degree of protection to an organization which invites members of the public to participate in activities with at least some degree of inherent risk.

Courts generally treat liability waivers as draconian in that they require one party to absolve the other of liability for negligent acts. As a result, the courts also tend to side against reliance on a waiver or read down waivers whenever appropriate to do so.

In the recent decision of Cooper v Blackwell, 2017 BCSC 1991 (CanLII) the court was called upon to determine the extent to which a liability waiver may survive over time and apply between related activities.

In the case, Mr. Cooper was a repeat customer of the unincorporated business, Wistaria; having gone on prior hunting trips with the business. Mr. Cooper paid for a grizzly hunting trip for the fall of 2013 and signed a liability waiver in advance. The hunt was not successful and, as a result, Wistaria offered to take Mr. Cooper out again in the spring of 2014 free of charge.

Wistaria obtained a new hunting licence for the second grizzly hunt, provided an invoice indicating that there would be no balance due for the second trip and stipulated that there would be a $1,000 royalty payable if the hunt was successful.

Mr. Cooper was ultimately unfortunately fatally shot by a guide by accident during the second trip. As the court noted at para. 19, the sole issue in dispute became whether the liability waiver signed in advance of the first grizzly hunting trip extended and applied to the second grizzly hunting trip such that there was no liability for Mr. Cooper being fatally shot. Mr. Cooper did not sign a second wavier for the second grizzly hunting trip.

The court noted that the language of the release contained confusing syntax and grammar that did not make it clear whether Wistaria would be released from all liability. While these comments highlight the importance of a liability waiver having clear language to be meaningful, the court did not turn its decision on the poor drafting of the waiver. Rather, the court turned relying upon the following analysis spelled out by the Supreme Court of Canada in Tercon Contractors Ltd. v. British Columbia (Transportation and Highways), 2010 SCC 4 (CanLII), as to whether a liability waiver will exclude liability (referred to as an exclusive clause):

  1. As a matter of ordinary contractual interpretation, does the exclusion clause apply to the circumstances established in the evidence?
  2. If so, was the exclusion clause unconscionable at the time the contract was made (e.g., because of unequal bargaining power, et cetera)?
  3. If the clause is valid and applicable, should the court decline to enforce it because of an overriding public policy concern that outweighs the very strong public interest in the enforcement of contracts?

The court hung its hat on whether the excursion in question was contemplated by the liability waiver (and, by extension, Mr. Cooper) at the time of its signing. It found that, when the waiver was signed, only one guided excursion was contemplated, the fall, 2013 excursion. The court went on to find that the spring, 2014 excursion was a separate and distinct trip not contemplated in any way by the parties when the liability waiver was signed.

While the court found that, from a commercial perspective, the second trip might be seen as a continuation of the first, the court also noted that the two trips took place in different hunting seasons, a new hunting licence was required, separate tags were required, separate invoices were issues (despite there being no amount due on the second) and a separate royalty charge was contemplated if the second hunt was successful.

The court made it clear that liability waivers can and do extend over multiple events on multiple dates, but that the waiver must clearly be drafted to apply to such situations. The course of dealing principle which might impute an imperfect contract with terms established by a long-standing history between parties was rejected with the court emphasizing that liability waivers are “…subject to rigorous scrutiny before being enforced by the court. Express notice and clarity of language are essential.”

Cooper v. Blackwell is demonstrative of the need for entities wishing to rely on liability waivers to ensure that the waivers are expertly drafted, that the purpose and limitations of liability waiver are understood by such entities and that such entities routinely review their waivers to ensure that they apply to all activities that might be engaged in by the parties executing such waivers. Even with repeat customers, if there is any doubt that a liability waiver might apply to any activity entailing risk, the entity offering such an activity ought to obtain a new waiver.

By Jeremy Burgess, Purshor Mitchell LLP

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In addition to our regular guest bloggers, Inside Internal Controls blog published by First Reference, provides occasional guest post opportunities from various subject matter experts on the topics of risk management and best practices in finance and accounting, information technology, environmental issues, corporate governance, sales/marketing and operations, not-for-profits and business related issues in Canada. If you are a subject matter expert and would like to become an occasional blogger, please contact Yosie Saint-Cyr at editor@firstreference.com. If you liked this post and would like to subscribe to Inside Internal Controls blog click here.
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