Published September 12, 2003
Court decisions are a critical source of information about the proper interpretation of the laws and rules that govern so many of our actions. Our goal with comments on case law is to provide you with an accurate summary of the main issues in the case, and to comment on the case's possible relevance. Keep in mind, however, that every case has unique facts and circumstances. Court decisions cannot be relied upon as legal advice because no two situations are exactly the same. Nonetheless, cases can provide valuable insights and taken together, they can offer guidelines for our conduct.
Why This Case May Interest You
Organizations frequently rely on releases and waivers of liability to protect themselves from lawsuits arising from their negligent conduct. Canadian courts are upholding contracts that set out to limit liability for negligent actions -- but not in every situation. This case is an example of a release form/waiver that failed. Read why.
Summary of Facts
Kettunen attended a mud bog race sponsored by the Sicamous Fireman's Club. She did not participate in the event but camped in the area designated by the organizers of the race for camping. The camping area was somewhat removed from the actual race site. Kettunen was injured when one of the drivers lost control of his vehicle and struck her. She sued the Sicamous Fireman's Club for her damages. The organization defended the legal action on the grounds that they had no liability as Kettunen had signed a release and waiver agreement at the site.
Can an organization always depend on the releases and waivers that it obtains from participants?
The Court decided that Kettunen could bring a lawsuit against the Fireman's Club even though she had signed a waiver. The Court found that Kettunen was never told what the document she had signed was intended to do. The Sicamous Fireman's Club made no effort to bring to her attention the legal effect of the document. The waiver was in fine print, was long and was not easy to read. A reasonable person could not possibly tell at a glance that the waiver was intended to preclude any legal action for any type of injury suffered as a result of the mud bog race. In addition, the words used in the waiver restricted its application to those persons who entered the "restricted area". The Court held that the "restricted area" described in the waiver did not include the designated camping area where Kettunen was injured. As a result, her action could proceed and the signed release failed to protect the organizers of the bog race.
A release and waiver program should never be considered a fail-safe mechanism to avoid liability for negligent acts. This case identifies three classic errors often made by organizations that use waivers:
On this latter point, organizations should carefully consider when the waiver is being presented to the participant. Waivers must be entered into voluntarily and knowingly. Allowing an individual no time to meaningfully contemplate the implications of a waiver is as problematic as presenting the waiver after significant time or money has been spent in preliminary activities prior to the "risky" event. Examples include presenting a waiver at 3,000 feet altitude to a first time skydiver, or presenting it to an eco-tourism adventurer who has paid enormous sums of money to purchase Arctic outdoor gear and travel from Brazil to Baffin Island. In both these examples, the participants' consent to the waiver likely involves some element of duress.
Lastly, although this was not an issue in this case of the bog race, all organizations must understand that waivers are not effective for minors, or other individuals who are legally incapable of entering into binding contracts.
A successful release and waiver program involves much more than obtaining signatures on a document containing the magic words "release", "waiver", "indemnification" and "save harmless". A waiver is an onerous contract which the courts will interpret very strictly against those who seek to rely upon them for legal protection. In Canada, the courts continue to look for ways to constrain the effects of waivers and releases of liability. For an organization to successfully contract out of liability for its negligent actions it must be able to demonstrate, on the basis of compelling evidence, that both parties to this bargain freely agreed to the contract (in the clearest and most unambiguous fashion) with full knowledge of the implications.