Waiver: What is it and When is it Used?

Author: Ian Aldridge, Progressive Legal

A waiver might sound like just another piece of paperwork, but for your Australian business, they’re more like a protective shield. Waivers are vital for any business providing goods or services that carry an element of risk to consumers.

The ultimate goal is to stop a customer from saying that they weren’t aware of the risks when they signed up. On this page, we’ll break down what waivers are, why they’re crucial for businesses in Australia, and how to get one tailored to your specific needs.

What is a waiver?

A waiver is a simple yet powerful legal document that allows a person to voluntarily give up specific rights or privileges.

In the context of business, it’s often used to release a company from liability or responsibility for certain risks associated with its goods or services. Essentially, a waiver is your business’s shield against potential legal claims.

Why is a waiver important for your business?

A waiver can be a powerful tool for businesses to manage risk and limit liability. Here’s why.

1. Liability limitation

Waivers help protect businesses from legal claims by customers who might be injured or suffer losses while using their goods or services. By signing a waiver, customers acknowledge the risks involved and agree not to hold the business accountable for those risks.

2. Risk awareness

A well-drafted waiver informs customers about potential risks, helping them make informed decisions about participating in activities. This transparency can enhance the business’s reputation for honesty and customer care.

3. Legal protection

In the event of a lawsuit, a waiver can serve as a crucial piece of evidence that the customer was aware of and accepted the risks, potentially reducing the business’s liability.

4. Cost efficiency

By limiting potential lawsuits, waivers can save businesses significant legal costs and reduce insurance premiums, making them a cost-effective risk management tool.

While waivers offer significant benefits in managing risk and limiting liability, it is crucial to ensure they are properly drafted and legally sound.

Get in touch with our experienced commercial team today to ensure your waiver is as effective as possible.

What are some examples of when I’d need a waiver?

Generally, a waiver is used when certain risks are associated with a business’ goods or services and the business seeks to limit its liability.  

Waivers are commonly used when a business provides dangerous or risky activities, such as extreme sports or recreational activities to customers. These dangerous activities could leave the business exposed to liability if a consumer is injured and makes a claim against the business. Some common businesses where waivers are essential include:

Extreme sports and recreational activities

Businesses like skydiving, go-karting, bungee jumping, horse riding, and similar activities inherently involve significant risks.

Participants could suffer injuries from falls, collisions, or equipment failures. Waivers in these scenarios ensure that participants acknowledge these risks and agree not to hold the business responsible for any injuries sustained.

Medical and allied health practices

In the medical field, certain treatments or procedures may carry risks, despite the best efforts of professionals.

For example, elective surgeries, chiropractic adjustments, or experimental treatments might not guarantee outcomes and could result in complications. Waivers help inform patients of these risks and limit the practitioner’s liability if adverse effects occur.

Beauty and alternative therapy providers

Services like cosmetic procedures, tattooing, acupuncture, and massage therapy can also involve risks such as allergic reactions, infections, or unintended results.

Providers use waivers to ensure clients understand these risks before proceeding with treatments, thereby protecting the business from potential claims.

Adventure tourism

Businesses offering activities like white water rafting, helicopter flights, motorbike racing, scuba diving, or aerobatic flights cater to thrill-seekers but also face high liability risks.

Waivers are crucial here, as they make participants aware of the potential dangers and reduce the business’s liability in case of accidents.

Fitness and personal training

Gyms, personal trainers, and fitness instructors deal with clients engaging in physical activities that can lead to injuries like sprains, strains, or more severe issues.

By requiring clients to sign waivers, these businesses can protect themselves from lawsuits related to exercise-induced injuries, emphasising that clients are aware of and accept the inherent risks of physical exercise.

Event planning and entertainment services

For events such as concerts, festivals, or amusement park attractions, the risk of accidents or injuries among large crowds is significant.

Waivers help manage these risks by making attendees acknowledge the potential for accidents and agree not to hold the event organizers liable for injuries or damages that may occur.

Childcare and educational programs

Organisations providing daycare, after-school programs, or educational trips are responsible for the safety of children in their care. Given the unpredictability of children’s behaviour and the various activities involved, waivers are essential to address the risks and ensure parents or guardians understand and accept these risks, reducing the organisation’s liability.

It’s crucial to use a waiver to alert the consumer or customer to the nature of the activity, it’s risks and for the individual to waive their right to take legal action against the business.

Essentially, the customer agrees to take responsibility for the risks associated with the activity offered by the business and agrees not to sue the business if they incur injury or harm.  

A waiver could also be used if photos or videos are taken of customers for promotional and marketing purposes to release the business of liability.

What should a waiver contain?

To make sure your waiver effectively protects your business, it should encompass the following:

Waiver in Writing

The waiver should be in writing and be incorporated into the contract with the customer.

Clear Risk Warning

Your waiver should explain the potential risks associated with the activity or service your business provides. It should be easy for the customer to understand what they’re getting into.

Release of Liability

State unequivocally that by signing the waiver, the customer releases your business from any liability related to those risks.

Examples of Non-liability

Specify what your business is not liable for, such as negligence, unforeseen events or loss of personal items and provide specific examples where applicable.

If a business’ negligence also means a breach of a consumer guarantee under the Australian Consumer Law (ACL), then there are very specific provisions on how that may be done.

We’ll discuss this next but generally, if you are able to exclude the consumer guarantees under the ACL, you will also exclude your liability for negligence.

Indemnity Clause in a Waiver

Consider including an indemnity clause, which makes the customer responsible for any damage or loss incurred as a result of using your services.

Explanation of Waiver

Explain how the right or remedy has been ‘waived’ to make it crystal clear. This is in accordance with Agricultural and Rural Finance Pty Ltd v Gardiner [2008] HCA 57.

Timing Matters

As per Alameddine v Glenworth Valley Horse Riding Pty Ltd [2015] NSWCA 219, make sure to provide the waiver at the time of the contract for the risky product or service.

How does a waiver interact with the Australian Consumer Law?

It’s important to note that Australian Consumer Law implies certain warranties into contracts for service providers. While waivers can be powerful, they cannot exclude certain guarantees under the ACL. These guarantees include:

Warranty of Due Care and Skill

Section 60 of the ACL implies that services will be rendered with due care and skill.

Warranty of Fitness for Purpose

Section 61 of the ACL implies that the service will be fit for the intended purpose.

However, there is an exception for suppliers of recreational services under section 139A of the Consumer and Competition Act, 2010 (Cth). You can exclude consumer guarantees for death or personal injury as long as it doesn’t involve reckless conduct.

Key takeaways

Waivers are essential for businesses in Australia that offer risky services or activities. They protect your business by making customers aware of potential risks and limiting your legal exposure.

Remember, there’s no one-size-fits-all waiver, so it’s crucial to have one tailored to your business.

At Progressive Legal, we specialise in drafting custom waivers for your business. Our experienced commercial lawyers can create a waiver that suits your needs, starting from $850 + GST.

Protect your business today – contact us for a tailored waiver that safeguards your interests and protects your business against risks.

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