Are COVID-19 Liability Waivers Valid and Enforceable?

Liability relief for businesses has been a hot topic as Congress debates a fourth phase of stimulus. The Republicans have demanded that any addition stimulus include protection for businesses from the coming wave of lawsuits that they will face. This has held up stimulus negotiations, leaving it to the states to decide whether or not to take their own action. Some states have either passed bills or have had Executive Orders that have given this protection for businesses. However, in other states where there is no protection, businesses ask customers to sign COVID-19 waivers. Many times, when customers sign waivers as a condition of doing business, a court will find them unenforceable for various reasons. The question here is whether a COVID-19 waiver would be valid if it were ever challenged.

The Answer Depends on the State that has Jurisdiction

We cannot give you a blanker answer to this question other than to say that it depends on the specific state in which you reside. Most states allow for some kind of liability waiver. The question is how much the business can disclaim. In some states, businesses can even force you to sign a waiver letting them off the hook for their own negligence, and it is completely valid in the eyes of the law. At the other end of the spectrum, a handful of states make liability waivers illegal.

When it comes to deciding whether to enforce a liability waiver, courts will look at several different things. The first thing to know is that, while liability waivers may be valid, courts generally do not favor them. Thus, the onus would be on the business seeking to enforce the waiver to show why it is valid. The judge will look at the exact language contained in the waiver and will read nothing into it. If there is anything missing or if the language is ambiguous, the court will construe it against the business that is trying to be released from liability. The burden would be on the business to show why they are not liable.

There are other principles of fairness that courts will consider when deciding if a liability waiver is valid. For instance, a judge will want to know that a liability agreement is entered into by two parties acting of their own free will. If there is a major disparity in bargaining power or there is what is called a "contract of adhesion," the court will decline to enforce the agreement.

Another factor that may be relevant here is that courts will often look at public policy and whether its aims would be subverted if the court allows a business to disclaim liability. This is where a COVID-19 release waiver may need some more consideration by a court. The public policy issue here that would need to be strongly considered is whether an individual could agree to waive their legal rights to sue for a pandemic.

Courts Will Look at the Public Policy Behind These Waivers

Liability waivers are generally used when there is a danger that is inherent in the activity. This could be something like downhill skiing, swimming in a pool, or even using a gym. What is different about COVID-19 waivers are that they take an everyday activity and try to free it from liability concerns. The premise behind these waivers is that an ordinary activity such as going to the store now becomes dangerous due to the pandemic. Viewed in isolation, these waivers are a very broad expansion of what a business may do to avoid liability.

However, courts will also likely look at this from the business' point of view when they decide whether the liability waiver is valid. Businesses would not be able to open to the public right now if they knew that they were going to be responsible if someone contracts COVID-19 on their premises. The fact that they would be able to get some legal protection would further their efforts to open.

There will likely not be one uniform answer about whether these waivers are enforceable. Each state may reach different results based on its own body of law and the way that it views liability waivers. For their part, even though businesses are asking people to sign these waivers, they will not fully know whether they are effective until a court rules against a plaintiff who has sued the business after signing a waiver.

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