What is a Waiver?

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Definition:

A waiver is a voluntary legal provision that releases you or another party in a contract from following the terms of the agreement without penalty.

🤔 Understanding waivers

A waiver is a legal provision in which a party voluntarily gives up a claim without the other party being liable. When you want to give up your legal right to something or let someone else voluntarily release their right or claim, you use a waiver. Waivers are usually put in writing to provide proof of the intent, but can also be spoken agreements. They are an exculpatory contract, which is a legal tool that removes a real or potential liability. While they are primarily used for legal purposes, waivers can also make you aware of the potential risks associated with an activity or decision. They can be part of business agreements, insurance contracts, financial transactions, and disclaimers when participating in high-risk activities. Relinquishing your rights with a waiver can have severe and long-lasting implications. It’s always best to talk to a knowledgeable attorney or legal professional before signing a waiver form.

Example

Let’s say you wanted to go horseback riding with a group of friends. Before you hit the trails, the ranch or riding facility requires everyone to sign a waiver. The form asks you to release the company from any liability if you or your property gets injured while on horseback. After signing the waiver, if you fall off the horse and break your wrist, you may not be able to sue the company for your injuries — even if they are at fault. You gave up your legal rights when you signed the waiver.

Takeaway

A waiver is like a get out of jail free card...

Just as a get out of jail free card ameliorates the negative consequences when you fall afoul of the rules in a board game, a waiver may let you — or the person to whom you’ve given a waiver — avoid consequences you (or they) would otherwise have faced.

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What is a waiver?

A waiver is a type of exculpatory contract that lets you voluntarily give up certain rights or claims. When you waive something, you might agree to not enforce specific terms of the contract or to not hold the other party liable if something happens.

A waiver can also ask you to modify a right. For example, you may waive your right to sue a company but still be able to resolve a dispute through the arbitration process outlined in the contract.

When you agree to forgo your rights with a waiver, you’re entering a binding agreement. Because it’s best to have evidence of your decision, putting the agreement in a formal written statement is common. Many businesses create waiver forms or include waiver language as part of a contract to have documentation of your relinquished rights.

Verbal consent is another way to agree to let go of certain claims. For instance, let’s say a police officer takes a person into custody. The person has the option to remain silent as part of their Miranda rights. If the person chooses to talk to the police, they can express their desire to waive the right to remain silent by simply making a statement.

Keep in mind that even if you don’t sign a waiver or give verbal consent you may waive your rights if you don’t take any action at all. In this instance, by not taking action, you’ve given up your opportunity to enforce the terms of a contract.

For instance, let’s say you have a contract with a client that includes a late fee if the client doesn’t pay an invoice on time. If payment was due on the 5th, but the client didn’t pay until 10th, you could add a late charge. You like working with the client, and they’ve always paid on time before, so you decide to let it slide. Because you didn’t charge the client for paying late, your inaction resulted in a waiver of the late fee.

What is the purpose of a waiver?

A waiver is a legal agreement the primary purpose of which is to let you or another party modify or relinquish a right, privilege, or claim. The agreement can be a separate document on its own, such as if you sign a waiver form, or added to a contract as a waiver clause. The result is essentially the same: You’re giving up a right by agreeing that you won’t enforce it.

There are many types of waivers, and each can serve a different purpose. The intent or outcome of using a waiver depends on the circumstances.

In a waiver of liability, the purpose is to release a person, company, or other entity from liability if the activity results in injury or death. You might sign a liability waiver if you rent equipment or a vehicle, go skydiving, or take part in ski or snowboarding sports.

Companies and governments can use fee waivers to waive charges and filing fees. For instance, you could ask your credit card company to waive your annual fee or request a court to waive a filing fee due to financial hardship. Another example of a financial waiver applies to tuition. A tuition waiver is a kind of financial aid where a college or university agrees to reduce the amount they charge you for a specific number of credit hours.

Insurance waivers are also common and can have a variety of purposes. When renting a car, you might decline insurance coverage through the rental company. You can also use an insurance waiver to waive health care coverage through your employer if someone else’s insurance policy covers you.

How does a waiver work?

Waivers can work differently depending on their type and purpose. Generally, all waivers prevent or approve an action contrary to what’s typically done. They are an agreement that you don’t have to pay or obey something and can be written, verbal, or as a result of inaction.

Typically, a waiver starts when you sign a waiver form or contract. You might sign a waiver of parental rights to voluntarily give up your rights to your child in the event of divorce, adoption, guardianship, or foster care. In this case, you renounce your right to make decisions about your child or to see or talk with them until they reach the age of majority.

With real estate, you have the option to waive rights if you’re buying a house. Usually, potential homeowners will have a professional inspection of the home to look for structural and system defects or malfunctions. Depending on the outcome of the examination, you could legally back out of the deal without losing your deposit. If you waive the contingency inspection, you can still commission a home inspection. But you agree to buy the house “as is” — or else forfeit your deposit — and give up your right to use the inspection report to get out of the agreement if you sign the contingency inspection waiver.

Is a waiver a legal document?

Waivers are exculpatory contracts, which makes them legal documents. They can stand alone, such as with a waiver form, or be added as part of a larger contract. The courts review the contents of a waiver using contract law principles. Just because it’s a legal document doesn’t mean it’s bulletproof. Not all waivers are enforceable in court.

For a waiver to be legally valid in court, it must be reasonable, follow the provisions of contract law, and not violate any state laws. For instance, if your car was being towed, you likely signed a waiver releasing the towing company from liability for potential damage to your car while being towed. But what if the driver was paying more attention to a smartphone than the road and got into an accident? In this case, it’s unlikely the waiver would hold up in court because the driver didn’t use reasonable care when towing your vehicle.

In the case of a liability waiver, some states don’t allow companies to disclaim any responsibility. Waivers in Virginia, Montana, and Louisiana aren’t enforceable at all, while Arizona, New Mexico, and West Virginia limit their reach. For example, in New Mexico, an ordinary person without legal training must be able to understand the waiver for it to be valid.

When should you use a waiver?

The decision to sign or consent to a waiver is a personal decision. Carefully examine the risks on a case-by-case basis to get as much information as you can to help you make the best decision for the situation.

Agreeing to a voluntary relinquishment of your rights can have serious consequences if you don’t fully understand what you’re consenting to. Any time you enter into a contract, thoroughly examine the terms, conditions, and clauses before you sign.

Because waivers use legal terms and must follow the rules of contract law, it’s smart to ask an attorney to review the contents. The legal system uses a meticulous set of laws, and one misplaced comma may change the entire meaning of the waiver agreement.

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