Hold Harmless Agreements
Hold harmless agreements are typically in writing and involve one party agreeing not to take legal action (sue) against another party. In exchange for this promise, the other party agrees to permit the first party to engage in a given activity.
These agreements can come in many forms. They can be separate contracts or, often, they are statements added to other contracts. They are also called different names, such as disclaimers or waivers. Schools use them in permission slips for student trips or activities, including team or individual sports. Youth sports leagues use them, vendors who rent recreational equipment use them, and plenty of businesses make such agreements part of their operations.
There are a number of issues to keep in mind with such agreements including:
- Are they necessary?
- Are they enforceable? – State laws often control this issue
- Are they valid? – If not worded properly, they may be useless or may have unintended consequences
- Are they fair? This depends on the level and nature of risk involved
- Are they part of a business or strictly a non-business transaction?
In some cases, it may make a lot of sense to use a solid hold harmless agreement. In others, giving up the right to sue or pursue compensation in case of a loss may be too valuable, and the better choice may be to give up participation in a hazardous venture. Be aware that it may not be valid to hold another party harmless on behalf of a child. Some states hold that a child’s right is separate from a parent’s, and a parent may not legally waive that right.
We recommend consulting legal counsel when deciding whether or not to use a hold harmless for your business. Be careful with the agreements you make.