With the outbreak of the global pandemic commonly known as COVID-19, it is understandable that businesses’ and business owners are justifiably concerned regarding potential liability through the contraction of the virus on premises or via-vis their employees and agents.
As is expected, many business owners have been rushing to attorneys’ offices requesting legal opinions on their potential exposure and seeking the preparation of liability release waivers to be presented to their potential clients and customers.
As of the time of this publication Congress has still not passed a comprehensive law outlining the legal framework for Covid-19 business ownership compliance and to avoid responsibility for the contraction and/or injury from the same. Similarly, current Federal & State law does not guarantee through contractual disclaimer or otherwise any absolute protection from liability for the transmission of Covid-19 to others, and no such Covid-19 waiver can absolutely prevent Covid-19 based litigation, or prevent state legislatures from retroactively nullifying contractual disclaimers at some time later.
Until the State legislatures or United States Congress provide further guidance, business owners are left to placing prevention policies in the workplace and drafting contractual releases.
Below are a few clauses every business owner should include in their release & waiver of liability forms in a proactive attempt to mitigate their risk when servicing customers and clients.
- Assumption of Risk
In general, an assumption of risk clause is a defense strategy term where a potential plaintiff for personal injury (i.e. Covid-19 transmission) is placing itself in a position that can result in injury or death, and that this person is well aware of the danger posed by the hazard but goes through with the act nonetheless.
At the outset, business owners should have their client/customers acknowledge that through the provision of the businesses’ services, the customers are well aware of the danger posed by such services via the contraction of Covid-19, and that they are nevertheless ok with proceeding with the same in the face of the hazard.
- Release of Liability & Waiver of CA Civil Code Section 1542
The most important clause to be included is an express release of liability, whereby the Client/Customer expressly waives its right to claims that may arise out of any allegation or claim based on injuries which related to Covid-19, including negligence, which derived from the Services provided by the business owner.
In a nutshell, California Civil Code Section 1542 provides that persons releasing their rights, do not release their rights to claims they are not currently aware of or suspect to exist at the time of executing the waiver, and if known by that person, that would have significantly affected their decision to execute the release.
Therefore, it is crucial for the business owner to include a term in its waiver & release, whereby the Client/Customer is acknowledging that they are waiving their rights to the protections afforded persons waiving such rights under California Civil Code Section 1542.
What this does in practice is an attempt to prohibit the Client/Customer from later arguing that the rights waived under the waiver agreement only applied to the harms that existed at the time of signing the waiver and did not apply to harms that arose in the future. This is important since the risk of Covid-19 transmission may occur in the future and not at the point of execution of the waiver.
- Express & bold key warning language.
It is important that if your waiver is ever dragged in front of a judge and jury that the waiver is determined to be in a form which is “conspicuous” enough to give an average person enough notice of their legal rights to have made a free and educated decision regarding such waiver of rights. This is typically done through making certain language bold, or capitalized, with larger font requirements. The intent is to not minimize the most important terms found in the waiver, such as in footnoting, or minimizing the font size of the key waiver terms.
At KAY GHAD LLP, we are dedicated to assisting, counseling and advising business owners of all sizes in mitigating financial and legal risk by developing legal strategies to keep your business safe. For help with your Covid-19 legal needs, please contact us at [email protected] or (213) 529-2900.
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