On the bookshelf next to my desk, I have a well-used copy of Waivers and Releases of Liability by Doyice and Mary Cotten. With highlights and sticky notes throughout, this comprehensive treatise on waivers is among my go-to resources when drafting enrollment agreements for camps.
In this article, we discuss some key takeaways from the treatise about how each enrollment agreement’s choice of law clause impacts the effectiveness of its waiver clause. Let’s begin by defining these terms.
What is the Choice of Law Clause?
Most agreements include a clause to identify the state law that governs the relationship between the parties. This is appropriately called the “choice of law” clause. In its simplest form, the choice of law clause reads as follows: “Any disputes that may arise out of this agreement shall be governed by the law of XYZ state.”
What is a Waiver Clause?
To once again oversimplify, a waiver essentially says the following: “Parents and the camper agree not to bring a claim against camp for injuries resulting from the camp’s negligence.” While standalone waivers are fairly common, day camps and overnight camps typically include waiver language in their enrollment agreements. This means that a well-drafted enrollment agreement is your waiver agreement (even though it also includes various other terms).
Do Waivers Work? Different Approaches in Different States
Perhaps you’ve heard the not-uncommon saying that “waivers aren’t worth the paper they’re written on.” I would add three words to make this more precise: “In some states, waivers aren’t worth the paper they’re written on.” But in other states, waivers are commonly upheld and serve as an important protective measure for the businesses that use them.
As one example, Massachusetts courts tend to enforce waivers and hold that public policy favors their use. In stark contrast, the Virginia Supreme Court has held that allowing a party to waive liability for their own negligence is against public policy. This means that a waiver provision that would be upheld in Massachusetts would be considered a violation of public policy in Virginia.
The Risk of Borrowing Contracts
I’d be remiss not to mention the well-intentioned, but often problematic, practice of camps borrowing enrollment and waiver agreements from other camps. We’ve all seen the common request in online forums: “We’re updating our enrollment agreement. Can other camps share what they use?”
The risk in taking this approach is that, if a camp in Virginia, where waivers are typically not allowed, borrows an enrollment agreement from a camp in Massachusetts, where waivers are commonly enforced, the Virginia camp may be in for a surprise if its enrollment agreement is ever scrutinized by a court.
Parental Waivers
In the camp world, our use of waivers is subject to an added wrinkle: parents typically enter into waivers on behalf of themselves and their kids. Can parents waive liability on behalf of their campers? Perhaps not surprisingly, the answer depends on which state’s laws apply. In New Jersey, for example, courts have held that parents can’t waive liability on behalf of their kids, although parents are welcome to waive liability on behalf of themselves. By contrast, Colorado courts have enforced properly-drafted parental waivers. Whether a particular waiver is upheld or struck down often depends on which state's laws apply.
This is Where the Choice of Law Clause Comes In
As noted above, the choice of law clause specifies which state’s laws govern the agreement between the parties. Courts generally respect the state law that’s chosen in a contract, but the choice can also be challenged under certain circumstances, such as when there's no reasonable connection between the chosen state and the relationship between the parties. [1]
Let’s assume you operate a traditional overnight camp in Maine, where courts don’t enforce parental waivers. If your summer program operates in Maine, you’re incorporated in Maine, and your year-round office is in Maine, then a court would be unlikely to uphold a Massachusetts choice of law clause; your enrollment agreement lacks any connection to Massachusetts.
The outcome may change if we slightly modify the facts: Let’s assume you operate a camp in Maine, but the camp is incorporated in Massachusetts, has a year-round office in Massachusetts, and many campers who attend the camp live in Massachusetts. Under these facts, a court may be much more likely to uphold the choice of law clause.
Some Key Questions
When selecting the choice of law clause for your enrollment agreement, you should consider a few important questions, including the following: Where is your summer program located? Where do most of your families live? Where is your camp incorporated? Where is your year-round office? Where does your management team sit?
Once you answer these questions, you’ll have a menu of states that arguably have a reasonable connection to the relationship between the parties. From there, you can determine which of those states has the most favorable laws regarding the enforcement of waiver agreements.
Conclusion
Waiver and Choice of Law provisions are two foundational and interrelated elements of strong enrollment agreements. Neither of the clauses is immune from challenge--indeed, it's often an uphill battle to enforce a waiver clause--but by understanding and drafting these clauses correctly, we may go a long way to protecting our camps from liability.
Footnote
[1] Enforcing a Choice of Law clause may become the first legal battle between the parties to a dispute. The plaintiff may argue that the chosen law would be contrary to the public policy of the state with the strongest connection to the agreement, the chosen law does not have a sufficient connection to the relationship between the parties, etc. But a well-drafted Choice of Law clause will take these potential challenges into account and empower your attorney to make a stronger argument in favor of your chosen law.