Exculpatory Clauses Releasing an Entity from its Own Negligence
02.26.15Advice to companies looking to update their pre-incident exculpatory clauses based on this latest ruling.
When is a pre-incident exculpatory clause valid and enforceable?
In February 2015, the Florida Supreme Court resolved a longstanding conflict among Florida’s District Courts regarding the language required in pre-incident exculpatory clauses to release an entity from its own negligence and issued a new seminal case in this area of law.
What does clear and unequivocal mean with respect to exculpatory clauses?
It means that an exculpatory clause must be unambiguous and the intention to be relieved from liability must be made clear. In other words, the wording must be so clear and understandable that an ordinary and knowledgeable person will know what he or she is contracting away.
Is specific wording necessary to meet this standard?
Prior to February 2015, Florida’s First, Second, Third and Fourth Districts held that exculpatory clauses were only effective to bar negligence actions if it clearly stated that it released an entity from liability for its own negligence. That generally required the terms “negligence” or “negligent act” to be clearly set forth to absolve the entity of its own negligence.
However, the Fifth District disagreed and held that an exculpatory clause could be clear and unequivocal and release a party from liability for its own negligence without specifically mentioning “negligence” or “negligent acts.”
In February 2015, the Supreme Court of Florida decided this conflict of whether a pre-incident exculpatory clause that did not contain express language releasing a party of liability for its own “negligence” or “negligent acts” was enforceable, and found in favor of the Fifth District’s reasoning. In Sanislo v. Give Kids the World, Inc., 157 So. 3d 256 (Fla. 2015), the exculpatory clause at issue did not contain the express terms “negligence” or “negligent act,” yet the Florida Supreme Court ruled it was sufficiently clear to absolve the defendant of the defendant’s own negligence because it was clear and unequivocal that the clause at issue was doing just that. It held that such clauses were effective to bar negligence actions where the language is clear and unambiguous indicating the intent to be relieved from liability in such circumstances.
What advice can you suggest to companies based on this ruling?
When drafting or reviewing exculpatory clauses, companies should look to the exculpatory clause approved by the Florida Supreme Court in Sanislo as a good model, but tailor the clause for its personal use. Furthermore, while it is no longer required to use the terms “negligence” or “negligent acts,” companies should err on the side of caution and nevertheless include these terms since the Florida Supreme Court did acknowledge in Sanislo that doing so may be a better practice and create a higher likelihood of passing the clear and unequivocal standard.