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Can business litigation be avoided through a release agreement?

On Behalf of | Sep 6, 2018 | Business & Commercial Litigation

People in Tennessee who have gone indoor skydiving, taken their children to trampoline parks or who have participated in recreational sports may have signed an agreement to not hold the facility liable if they are injured on the premises. Known as a “release” or “hold harmless” agreement, these documents may contain language that the participant assumes the risk that an injury might occur. However, are such agreements enforceable should there be a contractual dispute?

While release agreements change the legal relationship between a company and a patron, in most states, they are not enforceable if the company commits gross negligence or intentional misconduct. Therefore, it is important that businesses ensure any release agreements they enter into are well-drafted, so the business can avoid liability. This post will gloss over some language release agreements can contain, but businesses interested in drafting a release agreement are encouraged to seek their own legal counsel before proceeding.

First, the language in a release agreement should be clear and unambiguous with little legal jargon. The print on such agreements should be large enough to be easily read by a patron. Finally, these agreements should not be printed on the same page as other release forms.

There are certain instances where a release agreement will not be enforced. For example, an agreement signed by a minor may not be enforced. An agreement that is signed after the injury took place may also not be enforced. Since the agreement itself can be a key piece of evidence should a patron sue a business, it is important that signed release agreements be kept safe.

In the end, what is important is that businesses looking to draft release agreements do all they can to ensure the agreement will be enforceable. Most businesses execute release agreements to avoid business litigation. With legal help, they may be able to draft a fair and appropriate agreement that resolves liability issues in a manner that meets the business’s best interests.