Copyright

What is Exculpatory Language? - Definition & Examples

Instructor: Kenneth Poortvliet
Exculpatory language is used in contracts to strip someone of his or her rights. In this lesson we will examine what exculpatory language is, show its limitations, and provide examples.

What Is Exculpatory Language?

In a contract, exculpatory language is language that frees one party of certain liability that may occur as a result of the agreement and waives the rights of the other party. The word exculpatory is based on a Latin words ex- (remove) and culpa (guilt), put together they mean 'to remove guilt.'

For example, the following may be in a rental agreement:

''The signer of this agreement agrees to hold the rental company harmless for any and all injury or damage that occurs with the use of this product, and further waives all rights under the law to seek legal redress ....''

The purpose of this clause is to absolve any liability of the rental company and to prohibit the signer from taking the company to court or pursue any other means of legal redress.

Exculpatory Language Example

Ian bought a new car battery, and paid cash. The clerk handed him a long receipt and told him to sign at the bottom. A week later he was driving with his family, and the battery exploded, causing serious injury. The auto store chain told him he had waived his right to sue them when he bought the battery. Can that be right?

Let's look into the law around exculpatory language to see if Ian the language in his contract is actually enforceable.

Is It Enforceable?

So, is this enforceable? Typically speaking, two parties can agree on just about anything, and the courts will enforce the agreement.

The first thing a court looks at when they are tasked with enforcing a contract is to see if there was an agreement, what the terms were, and whether the agreement comports with the law.

To see if there was an agreement, the bargaining position of the parties must be at 'arms length'. This means that if one of the parties has no experience in negotiating, business, and contracts, while the other does, then the court is going to look at the contract in the most favorable light for the inexperienced party.

For example, say there is a written contract between two businesses. It calls for the removal of toxic waste from a factory, which is then to be dumped at the hazardous waste facility for $500 a load. The court would most likely enforce that agreement.

A signature on a contract serves to show there was an agreement and the terms of that agreement.
Signature

Why?

  • The contract was in writing, which is evidence of mutual agreement, made 'at arms length' by two experienced companies.
  • The terms were spelled out in the contract, and there is no law prohibiting the conduct of either party.

However, if the price was left out, or it was just a handshake agreement, then the court would have a difficult if not impossible time interpreting the terms, let alone enforcing them.

The Law

The contract itself must adhere to the law. Most of the time a contract is considered illegal if the subject matter of the agreement is illegal, like drug distribution, etc. Say our previous example's contract specified that the waste was to be dumped in a public landfill. That is contrary to environmental laws, so the court will not enforce that provision.

In other cases, it's not the subject that's illegal, but the contract language that is prohibited or contrary to the law. For example, in many states, you can't sue a doctor for malpractice unless you first get the facts of your case certified by a board of doctors and lawyers. If they don't certify the case, then you can't file.

So if a contract specifically allows a patient to sue a doctor for malpractice without being certified, then that language is considered illegal, and the court will not enforce it even though one party agreed to waive the certification right.

Is Exculpatory Language Prohibited?

In most cases, the parties can put exculpatory language in a contract, and the courts will enforce it.

For example, say you rent a bounce house for your child's birthday party. The agreement said that you would not hold the renter liable for any damages if you didn't follow the safety instructions for the equipment. But later, a gust of wind blew the house 20 feet in the air causing injury. You want to sue, but if the house wasn't properly tethered, then the court would likely uphold that language.

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