Define: Exculpatory Clause

An exculpatory clause, also known as a release of liability clause or waiver, is a contractual provision that seeks to limit or release one party from liability for damages, injuries, or losses that may occur as a result of the other party’s actions or negligence. These clauses are commonly found in contracts for various activities or services, such as recreational activities, sports events, rental agreements, or commercial transactions. Exculpatory clauses may stipulate that one party waives the right to sue or hold the other party responsible for any harm or injury suffered, even if it results from the other party’s negligence or misconduct. However, the enforceability of exculpatory clauses may be subject to legal scrutiny and may vary depending on factors such as the language used, the context of the agreement, the bargaining power of the parties, and applicable laws and regulations. Courts may invalidate exculpatory clauses if they are found to be unconscionable, against public policy, or if they attempt to waive liability for intentional or grossly negligent acts. Despite these limitations, exculpatory clauses can provide some degree of risk management and protection for parties entering into contracts, provided they are drafted and applied in a manner consistent with legal requirements.

A provision in a lease that absolves the landlord from responsibility for all damages, injuries or losses occurring on the property, including those caused by the landlord’s actions. Most US states have laws that void exculpatory clauses in rental agreements, which means that a court will not enforce them.

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This glossary post was last updated: 29th March 2024.