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What Kind of Liability Release Is Required for a Raft-up?

Our yacht club organizes a series of cruises each year to various locations and harbors throughout Southern California. In the past, these events have called for us to raft our boats together, and we often have more than 20 members at each event. We have never had a problem, but we are concerned because our flag officers and other club members direct the boats into their respective positions in the raft-up, and there is always a chance that someone will make a mistake. I have been asked by the club to put together a standard liability release. I have found a few of these online, but I am not sure if they will work under maritime law. Can you advise?
The drafting of a liability release is a complicated procedure in connection with any activity or transaction. The unique risks inherent in a maritime environment, and the unique features of maritime law that may apply to the activity described by our reader, suggest that the use of a “standard” form is rarely appropriate.

The reader is seeking to protect the club and its members from mistakes that may occur during the raft-up events. These “mistakes” are more commonly known in a legal context as “negligence.”

A contractual provision that seeks to exempt or exonerate a person from liability for his or her own negligent acts is known as an “exculpatory clause,” or sometimes as a “red letter clause.” A limitation of liability clause is a less aggressive variation of this concept, designed to limit a party’s exposure for their negligence to a particular dollar amount rather than to shield that party from liability altogether.

We should note at the outset that a liability release is a type of contract, whereby the participant in the activity agrees to give up certain rights in exchange for something of value. The “something of value,” or “consideration,” may take many forms, but it must be clearly stated in the document. A release that calls for one party to give up certain rights while receiving nothing in exchange is unenforceable.

The law surrounding contractual clauses that seek to limit (or entirely eliminate) a party’s liability will vary considerably depending upon the law that is applied to the transaction. State law throughout the country varies, and even federal admiralty law will vary depending upon which federal circuit the case is tried in. The raft-up activity described by our reader would probably be subject to admiralty jurisdiction, but the liability release itself may not be deemed to be a maritime or admiralty contract, in which case it would be evaluated under state law.

If the release is deemed to be an admiralty contract performed in California, it would be subject to the interpretation of the law rendered by the federal Ninth Circuit Court of Appeals, which allows certain parties to completely exonerate themselves from liability so long as the clause in question includes certain language and it is clearly worded.

We should note that while the Ninth Circuit and several other federal circuits have taken this approach, it varies somewhat from a United States Supreme Court case that threw out one of these clauses in a vessel towing contract.

Similar to the Supreme Court case, if the contract is subject to California law, the courts here have held that complete exoneration from liability is unenforceable under certain agreements, such as a contract for professional services, while other types of contracts may include these clauses.

Under both state and federal law, a limitation of liability to a particular dollar amount is usually enforceable if certain conditions are met and the dollar amount is reasonable under the circumstances. As such, parties seeking to limit their exposure in this manner may want to draft a clause that concedes a certain amount of liability, rather than seeking to completely eliminate that risk.

The courts throughout the country view a liability release as a device that shifts the risk of a particular activity from one party to another, pursuant to a negotiated exchange between the parties. This is often a bit of a fiction, since we tend to sign documents without carefully reading the fine print. Nonetheless, parties may protect themselves through a contractual liability release if certain conditions are met.

Regardless of the nature of the activity, this is a complex legal issue, and a “standard” form contract should not be used. Instead, seek the advice of an attorney experienced in drafting these types of agreements.

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