Ask The Attorney

Ask A Maritime Attorney: Can a boatyard Force me to release them from any liability even if they’re negligent?

Question:

I took my boat to a boatyard for a list of projects, and when I arrived they asked me to sign a work order.  The document seemed pretty straight-forward, until I started reading the fine-print on the back of the page.  There was a lot of “legalese,” but what really stood out was a clause that required me to release them from any liability, even if they were negligent!  I have never seen anything like that before.  Is it enforceable?

 

Answer

Recreational boaters often shake their heads in disbelief when confronted by some of the basic principles of maritime law.  This is something that I have discussed in previous installments of this column, and the confusion is usually explained by the fact that recreational vessels are subject to the same laws that govern the operation of large merchant ships, and of course the laws developed with merchant ships in mind.  The contractual liability release described by our reader is one such example.

The liability release is a prominent feature of maritime agreements, and it is especially common in shipyard contracts.  It is known as an “exculpatory clause.”  Exculpatory clauses are generally enforceable in one form or another in maritime contracts throughout the United States.

As a general rule, maritime law recognizes the rights of parties to enter into maritime contracts on the terms they choose. The theory is that a vessel owner would have negotiated a removal of the exculpatory language if he or she did not agree to be bound by it.  This may be true in the case of the corporate owner of a large ship that has negotiating power because it is bringing a multi-million dollar project to a shipyard, but it is probably not realistic for the owner of a recreational boat who needs a haul-out for bottom paint and new zincs.

Exculpatory clauses exist in a variety of forms, ranging from a partial limitation of liability to the full release described by our reader.  A release under both California state law and Federal law in California may call for a full release of liability, but the language in the contract must be carefully phrased.  For example, it must clearly state that the customer is releasing the shipyard or other service from its own “negligence,” rather than simply stating that they are released from “all claims.” And, the language must be prominently displayed rather than buried somewhere in the fine print.  There was a time when this requirement for prominent display was met by using a red-colored type face.  The red type face is no longer required, but an exculpatory clause is still often referred to as a “red-letter clause.”

Exculpatory clauses are subject to two major limitations.  First, Courts in certain areas of the country (such as in the Gulf states of Texas, Louisiana and Mississippi) have rejected clauses in maritime contracts that purport to totally exonerate a party for its negligence, but they nonetheless enforce clauses that limit the party’s liability to some extent.  In those jurisdictions, contracts may limit a party’s liability with language such as “in no event shall our aggregate liability exceed the sum of $10,000.”

The second major limitation to exculpatory clauses is that they cannot be used to absolve a party from their own “gross negligence.”  This limitation is found throughout the country, including in California.  Gross negligence can be an ambiguous phrase, but it is best defined as “the want of even scant care or an extreme departure from the ordinary standard of conduct.”  Courts have found that public policy should not permit a party to contractually relieve itself of liability for intentionally or recklessly caused harm.

The “legalese” printed on the back of a contract is considered by many to be a list of insignificant “boilerplate” guidelines for the activity in question, and as such it is often overlooked.  The good news is that, as noted above, any serious limitation to your legal rights and remedies relating to the service to be performed must be prominently displayed so that it stands out from the other “fine print.”  Take the time to read it carefully, and, as always, contact an attorney experienced in maritime contracts if you have questions.

David Weil is licensed to practice law in the state of California and as such, some of the information provided in this column may not be applicable in a jurisdiction outside of California. Please note also that no two legal situations are alike, and it is impossible to provide accurate legal advice without knowing all the facts of a particular situation. Therefore, the information provided in this column should not be regarded as individual legal advice, and readers should not act upon this information without seeking the opinion of an attorney in their home state.

David Weil is the managing attorney at Weil & Associates (www.weilmaritime.com) in Seal Beach. He is certified as a Specialist in Admiralty and Maritime Law by the State Bar of California Board of Legal Specialization and a “Proctor in Admiralty” Member of the Maritime Law Association of the United States, an adjunct professor of Admiralty Law, and former legal counsel to the California Yacht Brokers Association. If you have a maritime law question for Weil, he can be contacted at 562-799-5508, through his website at www.weilmaritime.com,  or via email at dweil@weilmaritime.com.

Share This:

Comments

Your email address will not be published. Required fields are marked *