A waiver and release agreement is one of the most essential legal instruments in the arsenal of travel business owners for insulating themselves against claims of future injury, harm, loss or damage. The law in most states allow participants in activities involving risk agree to release and hold harmless the business owners from liability connected to such hazards.

That is not the case in Virginia, at least not with respect claims of personal injury. In Hiett v. Lake Barcroft Community Association, 241 Va. 191, 418 S.E. 2d 894 (1992), the Virginia Supreme Court held that an agreement signed by plaintiff to participate in a triathlon which purported to prospectively waive liability for personal injuries violated public policy and was, therefore, void. In so doing, the state supreme court reaffirmed a 19th century decision holding that such provisions are prohibited "universally." The court specifically held that "to put the other parties to the contract at the mercy of its own misconduct... can never be lawfully done where an enlightened system of jurisprudence prevails."

Due to the strong public policy in Virginia against provisions that release a party from claims of personal injury, aren't such agreements worth less than the paper they are written on since such provisions are banned in the Commonwealth?

The answer is a resounding NO. In spite of unfavorable precedent in Virginia, these exculpatory agreements can offer the businesses that use them protection against lawsuits. The agreement serves other functions apart from exculpating the business operator from liability through an express release from liability. Here are seven reasons why you should have them if you own a travel business in Virginia:

1. Putting clients on notice of the risks associated with travel. Courts have routinely held that travel agents and tour operators are under a duty to warn their clients of any dangers the agent and tour operator either knew or should have known about but that client would not know about. A well drafted waiver agreement warns clients of specific travel risks including but not limited to those associated with disease, poor sanitation, transportation accidents and political instability in travel destinations. Proof of the client's acknowledgement of the existence of such dangers in a document signed by the client should aid a determination by a judge or jury that the agency or tour operator had, in fact, fulfilled its legal duty to warn clients of the risks of travel.

2. Jurisdiction in Virginia. As a business owner you can get the other party to agree to adjudicate any and all disputes in a court sitting in the county in which your business is located in Virginia. Commonly called a "forum selection clause" or a "jurisdiction clause" this provision establishes a significant hurdle for potential litigants and saves you the extra expense of having to defend lawsuits filed in courts all across the country. Conversely, for claimants in far away states the prospect of suing in Virginia adds significant costs and inconvenience which may deter the suit in the first place.

3. Home turf advantage. Selecting Virginia courts as the venue also offers one distinct advantage for defendants in a negligence case. While travel companies don't get the benefit of the more favorable laws in other states related to waiver and release provisions, they do benefit from the fact that it is more difficult to prove negligence in Virginia than in most other states. Virginia is one of a minority of jurisdictions that follow a "contributory negligence" standard meaning if the claimant's own conduct plays any part in causing his or her own injuries, the claim is completely barred from recovery. In other words, in order to recover damages for a negligence claim in Virginia the claimant must prove that the defendant is 100 percent negligent for his injuries. If the plaintiff is at fault to any degree, even one percent, he is barred from recovery. Evidence that the client was warned beforehand about the dangers of travel to a particular destination but, nevertheless, decided to participate in the undertaking could be sufficient to demonstrate that the plaintiff was at least one percent negligent which, thereby, precludes him from prevailing on the merits of his claim. Therefore, businesses that contractually require clients to agree to resolve disputes in Virginia courts may benefit from a home turf advantage distinctly available in Virginia.

4. Property claims. While the law maintains that waivers for personal injury are invalid, Virginia courts have affirmed the right of parties to contract to prospectively release the other for claims of property damages. So, a waiver agreement can still protect you against a claim related to the loss or theft of a client's diamond ring or valuable wristwatch during a tour, for example.

5. Valid reasons to include exculpatory language. The Virginia exculpatory restriction is judge-made law, not the result of legislation. The law determined by courts is in a constant process of evolution, development and interpretation. Certain activities that were once illegal, such as gay marriage, are now legal in various parts of the nation. Even in Virginia which boasts a conservative legal tradition we should not assume that its laws are stagnant or that an exception to its laws will not be found in the future.

So, when writing an exculpatory clause it is best to preface it by limiting its enforceability "to the fullest extent permitted by law." To be clear, there is a very low chance that the exculpatory clause would be enforceable based on the current state of Virginia law but the insertion of the aforementioned language lends legitimacy to the inclusion of the exculpatory clause, recognizing that Virginia's laws are still evolving.

Additionally, the agreement should include a "severability clause" which provides that any term that is found to be invalid, unenforceable or illegal will be severed from the agreement without affecting the remaining provisions in the document, including those showing that you warned the client of the risks. Having the severability clause will save the whole agreement from being invalidated and found inadmissible in court as opposed to just the specifically unenforceable terms.

6. Promoting responsible behavior. The exculpatory language, at the very least, reinforces the notion in the client's mind of the possibility that they will be exposed to certain risks by participating in the activities set forth in their trip itinerary or promotional materials. The affirmation of such warnings indirectly encourages them to exercise the necessary amount prudence and caution to safeguard their personal safety during travel. If promoting personal responsibility helps prevent personal injury and the lawsuits that follow then the essential purpose of the waiver and release agreement has been achieved.

7. Deterrence. From a practical perspective, the exculpatory provision could deter clients from asserting claims against your travel company. Potential claimants who lack knowledge about the current state of Virginia law and who have not sought advice from an attorney on this issue may decide not to pursue their claim believing they have waived their right to assert a claim.

In sum, a waiver and release agreement is, perhaps, the most essential tool that travel businesses can use to manage risk and limit liability. That is true even in Virginia which arguably has the most unfavorable law regarding the enforceability of waiver and release agreements. But Virginia is not the only state that prohibits exculpatory clauses on public policy grounds. The Supreme Court of Washington has ruled that a parent generally does not have the legal authority to waive a child's own future cause of action for personal injuries resulting from a third party's negligence. See Scott v. Pacific West Mountain Resort, 119 Wn.2d 484, 834 P.2d 6 (1992). Therefore, because state laws lack uniformity on this issue, when preparing such agreements it is always recommended that you consult an attorney who is knowledgeable about the law in your state.

Posted May 1, 2014