Liability Release Forms Reduce your exposure to personal-injury lawsuits. By Michael A. Thurman, Esq. What’s your worst nightmare as a store owner or distributor? Trust me, I can think of a worse one—I’m a lawyer. The board you closed out at the end of last season covered with your shop stickers is marked Plaintiff’s Exhibit One. You are on the witness stand in the Nevada County Superior Court, representing your company in a trial for damages sustained by the board’s owner when he fell into a tree well while boarding out-of-bounds near Donner Ski Ranch. A judge and twelve jurors sit grimly across from you, weighing your every word, deciding whether your company should be held responsible. The plaintiff’s attorney begins asking you whether anyone ever explained to the young plaintiff that his bindings would not release if he took such a fall. Your company’s future hangs in the balance with your answers. As unlikely as this scenario may seem, the truth is that as the snowboarding industry continues to prosper, manufacturers, distributors, and retailers are becoming greater potential targets for such lawsuits. Yet there is a simple and effective step that can be taken by every shop, distributor, and manufacturer to avoid this nightmare: get a release. The California Court of Appeal recently underscored the importance of obtaining a release from every customer who buys, rents, or has their equipment worked on by a snowboard shop. In Philip A. Olsen v Breeze, Inc., 48 California Appellate 4th 608 (July 31, 1996), the court held that requiring customers to sign proper liability release forms does not violate the Customer’s Legal Remedies Act nor does it constitute unfair competition. Instead, in effect the court said that requiring a release is just good business. Although the case involved a skier and ski shop, the legal principles are directly applicable to the snowboarding industry as well. The Olsen case arose when a plaintiff’s lawyer took his skis to be serviced and have the bindings adjusted by a local ski shop. As a condition for returning the skis, the shop required the plaintiff to sign a standard release form that described the risks of skiing and released the shop from any liability for injury resulting from the use of the equipment. The customer/lawyer refused to sign the form and the shop refused to return his skis. Being a lawyer, the customer sued the shop, six major ski equipment distributors, and the operator of two Northern California ski areas for violation of the Consumer’s Legal Remedies Act and unfair competition. He claimed it was unlawful and unconscionable to require customers to sign liability releases as a condition for obtaining goods and services. The court of appeal found that the releases were legal and enforceable so long as they did not prohibit customer claims for strict liability on defective products. The court stated, "Such agreements, in the context of sporting or recreational activities, have consistently been enforced." To the plaintiff’s claim that the releases were unconscionable, the court said, "There is nothing inherently unreasonable in skiers agreeing with ski equipment distributors or service providers to allocate to skiers the risk of injury from failure of a ski binding to release properly. Skiers already assume the risks inherent in the sport." The Olsen decision suggests that shops and distributors take huge risks if they fail to obtain properly worded releases from every customer who buys, rents, or has work done on their equipment. The keys to insuring that your release protects your business to the maximum extent allowed by law are as follows: Obtain a properly worded release. The release "must be clear, unambiguous, and explicit in expressing the intent of the parties. Such an agreement, read as a whole, must clearly notify the prospective releaser or indemnitor of the effect of signing the agreement." The Olsen court approved several different release forms, including the language shown in the sidebar which was used by Salomon/North America, Inc. Some manufacturers, such as Burton and Nitro, provide release forms that are designed to protect both the manufacturer, and the retail store and its employees. However, since manufacturers’ releases are not always provided, not always available, and vary considerably in language and scope, store owners should obtain their own release forms and insist that employees use those forms for every sale, rental, and repair of snowboarding equipment. If you currently use a release form, have your attorney review it in light of the applicable laws in your state. If you don’t have a release form, see an attorney as soon as possible about getting one. Use it or lose it. A recent visit to a local snowboard shop revealed the following: • The store has its own release agreement that provides some protection for the shop’s owners and employees. • However, the release is not drawn as broadly as allowed by California law, and does not specifically release claims resulting from a customer’s death. • Worse, the store does not always require a signed release from its customers. The store manager candidly acknowledges, "It’s hard to make sure that we get [a release] for everyone." He said that the shop always obtains a release on the sale of Burton equipment because the manufacturer provides updated release forms (which protect both Burton and the store employees), and because the Burton representative has stressed the importance of obtaining releases. However, on sales of other equipment, and on rentals and repairs, he says the store does not usually obtain a release from its customers. The manager suggests that manufacturers and distributors could mount release forms in adhesive packages on boards and other equipment with bold print, reminding the store representative to get the release signed by the customer before completing the sale. Consistent with this suggestion, Joyride announced in October that it will begin shipping liability forms with all its boards in a packet that outlines how to fill them out and what to do with them. This approach should be adopted by the entire snowboarding industry. In addition, distributors in the skiing industry customarily offer indemnity (or reimbursement) to retail shops for certain liabilities—but only if the shop has obtained the customer’s signature on a release form. Similar incentives make sense in the snowboarding industry, with suppliers offering to indemnify retail stores if they obtain an appropriate release from every customer. However, in today’s world of lawyers and lawsuits, what greater incentive does a store need beyond preventing its own legal problems? That’s why every retail store should have and use its own release form when there is no supplier’s release or when the release provided by the supplier fails to adequately protect the interest of the store and its owners and employees. Understand the limitations of liability release forms. Unfortunately, releases do not always provide unlimited protection from all potential liabilities related to the equipment. California’s public policy of protecting consumers from injuries caused by defective products prevents sellers and lessors of personal property from contracting away such liability. To protect against defective-product claims, manufacturers and retailers should inspect and test equipment before it is sold or rented to customers and keep records of the dates, test results, and the serial numbers of the equipment reviewed. Another important issue that retailers must consider is the age of the customer. In California, as with most states, a minor under the age of eighteen does not have legal capacity to enter into a binding legal contract. Thus, if you find your customer sorting through quarters, dimes, and nickels, marbles and bubble gum wrappers to add up the cash needed to pay for that 400-dollar board, you may need to get a parent’s or guardian’s signature on the release form to make it enforceable. Now where is that #!&@* release? Preparing and using a properly worded release does no good if it can’t be located if and when a claim is filed. Implement procedures to insure that every release, once signed by the customer, is filed in a safe and accessible manner. Since nearly all claims are brought by or on behalf of the customer, releases should be kept in alphabetical order based on the customer’s last name. If a claim is made, provide a copy of the release to the risk manager or attorney who is defending the case on behalf of your company. Keep the original unless the attorney instructs you otherwise, so that everyone will know where it can be found. A liability release form can be an important tool for managing the risks associated with your business. By devoting a minimal amount of time to working with your attorney to obtain a good release form, and training your staff to use it every time, you will be able to sleep easier knowing that you have reduced the chances of winding up on the witness stand with your business on the line. After weighing the potential risks of not requiring a release against the two minutes of effort needed to get a release from each customer, the manager of the store I visited says, "Getting a release from every customer is going to be mandatory, starting now." _______________________________________________________________________ Mike Thurman is a novice snowboarder, a trial attorney, and a young partner in the Long Beach, California office of Keesal, Young & Logan. He primarily handles business litigation and has defended clients from various industries in trials and arbitrations in California and Oregon. Reach him by e-mail at: [email protected]. Salomon/North America, Inc. Release The following is a sample of the wording used by Salomon/North America in the company’s release form at question in the Olsen case. I hereby release from any legal liability, the ski shops and its owners, agents, and employees, as well as the manufacturers and distributors of this equipment from any and all liability for damages and injury or death to myself or to any person or property resulting from the selection, installation, maintenance, adjustment or use of this equipment based upon negligence, breach of warranty, contract or other legal theory, accepting myself the full responsibility for any and all such damages, injury or death which may result. Back to Business Main