The Enforceability of Liability Waivers Under Nevada Law

There is a growing trend among businesses to require their clients to sign liability waivers in what are perceived as potentially risky activities.  These range from go-kart tracks to sky diving to trampoline parks.  These are done through adhesion (take-it-or-leave-it) contracts.  In other words, unless you sign the waiver you cannot participate in the activity.  Courts have mixed reactions on the interpretation and enforceability of these types of agreements.

What Can Make A Waiver Invalid?

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In determining whether a waiver is invalid the courts look at whether the agreement is “unconscionable.”  This is a fancy lawyer word for excessive or unreasonable.  The Nevada Supreme Court has defined when an agreement is “unconscionable.”  The Court will look at procedural unconscionability.  Examples of this include putting the waiver in “fine print” or hiding it on the back of the agreement.  It can also mean hiding the waiver within another paragraph where one would not expect to find it.  The agreement must also be easily understood and not contain paragraph after paragraph of “legalese.”

The court will also look at substantive unconscionability. Take-it-or-leave-it contracts of adhesion are not favored and are closely scrutinized by the Courts in Nevada.  In the case of  Burch v. Second Judicial Dist. Court of State ex rel. County of Washoe, 118 Nev. 438, 49 P.3d 647 (2002), the Nevada Supreme Court laid out the requirements to enforce these contracts.  There must be: (1) a plain and clear notification of the terms; (2) an understanding or knowledge of consent; and (3) it falls within the reasonable expectations of the weaker party.  If the waiver does not meet these requirements you may be entitled to compensation following an injury even if you signed the waiver. This is primarily looking at whether the contract was done on the take-it-or-leave-it basis described above.  If this is the case it can make the contract unenforceable.

What Can A Liability Waiver Cover?

Liability waivers cannot absolve a business owner from intentional acts (e.g., an owner or employee intentionally injures you) or gross negligence (e.g., the owner or employee blatantly disregards known safety hazards).  Liability waivers are only enforceable to limit liability for the normal risks associated with participating in a potentially dangerous or risky activity. These types of liability waivers are not favored by the courts.  However, assuming they meet certain standards they may be enforced by the court.  The business will be required to demonstrate the waiver meets several legal standards.  The court is required to interpret the waiver in the light most favorable to the person who signed it.

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