Dear Mary, My business provides a somewhat dangerous service and I require everyone to sign a liability waiver before they participate. A friend recently told me that liability waivers aren’t worth the paper they’re written on. Is that true?

Liability waivers are signed releases in which people give up certain rights in exchange for the services provided by a business. The purpose is to limit or eliminate the liability of the business if someone gets hurt.

There are several problems with liability waivers. Consumers usually don’t think about what they’re giving up when they sign these kinds of forms. People either skip reading it because it’s long and full of obscure legalese, or they do read it and still don’t understand what they’re giving up.

The next time you park in a private garage, take a look at the back of your parking slip. California courts have held that these preprinted tickets with liability waivers on the back can give sufficient notice that the lot will not take responsibility for damage.

But what other option do you have if you want to participate? It’s not like you can park in the garage without “agreeing” to the waiver of liability.

The general rule in California is that releases and liability waivers can be enforced, as long as they are properly drafted and executed and are otherwise recognized as a valid agreement. That doesn’t necessarily mean that if you sign a waiver and are injured you completely give up your right to be compensated for injuries.

You may challenge a waiver of liability if it’s illegal in form or content. The content and form must be easy to read and it must be clear and explicit with regard to its scope and effect. A layperson should be able to understand it and also appreciate its significance.

Under California law, a release cannot extend to claims that a consumer doesn’t know about when they sign a release. The intent of this law is to prevent people from inadvertently waiving unknown claims merely by signing a general liability waiver. If you’re drafting a waiver, it should include a direct quote of this law, which is often called a “Section 1542 waiver.” I also recommend including a space for consumers to initial next to that language, indicating that they acknowledge the 1542 waiver.

Drafting a valid waiver is not an easy task. Courts have invalidated releases if the language is oversimplified, if a key word is in the title but not the text, and if the release is too lengthy or too general.

Like any other contract, waivers can be invalidated if they are obtained by fraud, deception, misrepresentation, duress, or undue influence. Fraudulently obtained releases can happen if the nature or contents of the document have been misrepresented, if the release was obtained without full disclosure of the relevant facts, or if the consumer was prevented from knowing about their claim.

Waivers can also be invalidated if you can prove that the other party was more than just negligent — what lawyers call “gross negligence” or “recklessness.” Gross negligence occurs when someone shows a completely willful disregard for safety and human life. For example, if the private parking garage from above has live electrical wires hanging from the ceiling.

Waivers do not prevent consumers from making products liability claims. Even if you’ve signed a waiver, you could still bring a claim against a manufacturer, distributor, or designer of a defective product.

The moral of the story is, if you’re a business, it doesn’t hurt to make your clients sign a liability waiver. If you’re a consumer, read what you sign! And if you’re injured and you’ve signed a liability waiver, contact an attorney for advice.

Mary Luros is a business law attorney with Hudson & Luros, LLP, in Napa, and can be reached at mary@hudsonluros.com or 418-5118. The information provided here is not intended as legal advice, nor does it form an attorney-client relationship with the author. The author makes no representations as to the reliability or accuracy of the above information. In a perfect world we wouldn’t need disclaimers — or attorneys.