What is a Contractor Liability Release of Liability Form?
A release of liability form is a way for two parties to eliminate liability for any damages or injuries that either one may be liable for in the course of fulfilling a contract. For example, if a contractor is hired to do construction work, it could be on a house, apartment building, or school. Any injuries or damage to any property may make the contractor liable for the expenses related to those injuries. A release of liability form will negate any rights to sue the contractor should any injuries befall a third party after they have signed the form . The release form may also be called a waiver of liability, hold harmless agreement, or exculpatory clause.
A release of liability form is an important document for both parties because it gives the company peace of mind that it will not lose money due to any unforeseen accidents. If the contractor is injured, the company will not have to worry about being sued. It can just fix the problems that came up during the completion of the contract.
Elements of a Contractor Liability Waiver
When drafting a liability release form for a contractor, certain fundamental elements should be included. Although these components can vary from one state to another, most liability releases for contractors should contain the following:
Parties involved. The liability release form should identify the parties who are contracting with each other. The contractor and the client should be listed in addition to any relevant agents and/or employees of either party.
Scope of work. The release of liability form should also specify the work the contractor will perform. This section should be fairly detailed so as to avoid confusion after contract execution.
Risks being waived. A contractor release of liability form for a construction or trades project should specifically list the risks the client is waiving. This helps protect the client against liability issues while educating them on the risks associated with the contract. These risks can include accidents, malfunctions and theft of materials.
Indemnification clause. Typically included in any contract of this type, an indemnification clause protects one party from liability for the actions of another. A strong indemnification clause will help alleviate the burden of liability for the contractor in cases where the client makes a mistake that results in injury or property damage.
Advantages of Contractor Liability Waivers
Utilizing a release of liability form can be beneficial to both parties involved in the contracting services. While this holds the most benefit for the contractor, it does offer some advantages to the client, as well. A liability waiver acts almost like a contract. The client is agreeing to work with the contractor, and is acknowledging that they are fully aware of the risks involved, and that they assume responsibility for any possible accidents or damage. This prevents the client from disputing their responsibility for damage after the fact.
For the contractor, a liability form acts as a document that protects them from potential lawsuits. If the contractor can provide signed documentation stating that the client agrees to the risks associated with the job, then the client has no case. If the form is filled out completely and accurately, and properly countersigned by the client, then a person cannot later show up in court and attempt to hold the contractor responsible for their injuries or losses. It’s not an absolute guarantee, but it undoubtedly goes a long way toward proving a contractor’s case.
Both contractors and clients can benefit from liability waivers. They can prevent future legal disputes, and therefore save time and money. A carefully written agreement describes the responsibilities of both parties involved, which can prevent problems by ensuring everyone knows what to expect.
Disadvantages of Contractor Liability Forms
Much like with disclaimers, it is beneficial to have release of liability forms in place for a variety of reasons. However, if you don’t have one, it can come back to bite you, both as a contractor and as a client. Whether you were not aware that you needed one, or wanted to save time during a busy season, failing to get a signed release of liability form increases the risk of complications.
First and foremost, it is important to understand that you are still liable for any injuries or damages that occur on your property if anything happens to your workers. Even if you are confident that the work you asked the contractor to do was done safely, you could still end up in court if an injury does occur. You could also end up in court if your worker makes a mistake that leads to injuries or damages. On the flip side, if you are a contractor performing work on commercial and residential properties, you are not only exposing — or overexposing — yourself to lawsuits, but there’s a good chance that you are harming your clients’ finances as well.
Again, there could be a way for either of you to get out of responsibility for the resulting damages or injuries, but neither of you will know for sure without a release of liability, and it is unlikely. As with many legal issues, this will usually end up costing a lot of money and time to sort out in court.
Let’s say you took every precaution to ensure that the work you were asking a contractor to do was safe. However, behind the scenes, your contractor was actually making mistakes. Despite your advanced request, they took shortcuts and did not complete your job up to full code. Your contractor even thought it was the safest way to go about the job, so when the departed, they left your home open to danger or even fire.
What happened to your house? What kind of damage did it do before it was fixed? These costs add up fast, and you didn’t foresee the number of problems stacked upon each other. Unless you have some form of liability release, your clients may sue you.
For example, let’s say the contractor broke through a pipe while digging out a foundation. They didn’t realize it until after they left for the night, and water flooded your home overnight. It doesn’t really matter if you had already paid their invoice — they are potentially responsible for any damage that flooding caused for the next 10 years.
Alternatively, let’s say a contractor provided a bid that they knew was lower than what the market rates are, but you agreed to it as long as they sent the signed release of liability along with the down payment. You get the product installed, and realize that it feels of much lesser quality than the one that you thought you were paying for. It’s flimsy and not as well-built, but you didn’t notice until after the fact. Now you don’t want to use that product, but what can you do? The contractor has your money, and you signed the release of liability.
Once you sign a release of liability, you have committed yourself to those services and products, and you agree to pay for them. If the contractor refuses to make good on their end, it will be a formal matter of law — and if you didn’t have a release of liability ready for them, you might not have proof of the contract.
How to Write a Contractor Liability Waiver
A contractor release of liability should be a detailed and individualized document that addresses the particulars of a particular construction or renovation project. This is where a skilled lawyer specializing in construction law will be able to offer the most help. If the contractor does not regularly complete releases of liability, it may be they are forced to rely on generic forms that fail to protect them once the work gets completed.
A contractor release of liability should always stipulate in detail what work was performed in relation to what property address, and how much was paid. It should also include a section as to whether there was a signed work order, estimate, or contract that the parties acknowledge served as a binding agreement , along with a release from any other amounts owed. All documents related to the transactions should be referenced and should be attached to the release of liability to be signed.
While the contractor release of liability does not have to be notarized to be effective, an attorney may advise that it be so. Not only should the contractor release of liability be signed by everyone involved, but it should also be witnessed by another person. The more identities attached to the signed document, the more difficult it becomes for the other party to later attempt to claim that the release is invalid.
Even if the release of liability is drafted by the contractor, at the very least, the property owner should have a construction law attorney look over the document before they sign it, and vice versa.
Legal Advice and State Variations
Effective use of Releases of Liability requires an understanding of the statutory and case law of the jurisdiction or jurisdictions in which the work is being performed, as the rules governing enforceability of such releases can vary from state to state. Although many states have adopted similar rules concerning general contract law, including contract interpretation and enforceability, not all states have fully embraced Releases of Liability forms as related to this particular area of the law.
Most states allow for some release of liability – meaning a contractor can have their homeowner/owner release the contractor from all liability arising from injuries to persons or property as long as the release of liability is not against public policy and has not been found to be unreasonable in its particular situation. Even in those states that do not recognize such releases now, this could change as courts continue to address the issue, particularly if encouraged by statutory authorization.
California Labor Code Section 2782(a) is one specific example of a statute that governs the enforceability of releases of liability as related to construction. It provides that a general waiver of liability for negligence is void and unenforceable when it arises in the context of agreements between contractors and owners for both public and private residential housing. Specifically, section 2782(a) states:
"A provision in a construction contract or other agreement entered into in connection with the construction of a building, structure, or other improvements on real property that purports to indemnify a person for that person’s own negligence is against the public policy of this state and is unenforceable."
In contrast, Wyoming for example has not yet addressed this issue and a releases of liability may still be available for use.
There are also other broader releases that can be used and that encourage use of release of liability forms in construction work. Although contact with an attorney licensed in the area where the work is being performed is always wise, the following points should be observed in connection to both the use and drafting of release of liability forms:
Remember that while releases of liability forms are generally enforceable, they are not absolute and could be set aside by a court if, after hearing the issues involved, they appear unreasonable or contrary to public policy.
Contractor Liability Waiver Templates
Contractor liability form templates are readily available both on the sites of legal advice publishers and through the websites of individual law firms. The Attorneys from The Hartman Law Firm LLC, for example , have provided a small library of release of liability form templates to readers on their website. One general liability waiver form for contractors is entitled a "General Waiver & Release of All Claims Form." A similar form is entitled a "Liability Waiver and General Release of Claims (for Contractors)." Less comprehensive forms for situations that may be problematic for clients or contractors include an "Equipment Rental Liability Waiver Form" and a "Construction Work Liability Waiver Form."
Release forms will likely vary from state to state but language and structure will be similar. When using templates caution should be taken to modify the documents for the particular facts and circumstances to ensure enforceability.
