What is an exculpatory clause?

An exculpatory clause is a provision found in certain kinds of contracts that frees one party from liability in the event of an accident or injury. These clauses are typically found in service-based contracts, such as gym membership agreements, rental agreements, and other consumer contracts. In Washington, exculpatory clauses are governed by chapter 4.22 RCW, which states that these clauses must be "clear and unambiguous". In general, an exculpatory clause is designed to protect the business or service provider from potential liability stemming from acts or omissions of their employees or other agents. These clauses typically cover the full range of losses or damages incurred, including direct and indirect losses, such as physical injury, as well as financial losses. However, despite their ability to protect companies, these clauses are limited by a few important restrictions. In Washington, an exculpatory clause cannot be used to cover intentional conduct, gross negligence, or criminal acts. An exculpatory clause also cannot be used to deny an individual the right to a hearing regarding any dispute. Ultimately, exculpatory clauses can be very beneficial for both parties in a contract. They can provide protection against liability, as well as reduce the potential for costly litigation. However, they still must meet the legal requirements of the state in which they are used.

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What is an exculpatory clause?

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