NEW JERSEY
Likelihood of Enforcement: Moderate
A. Liability Waivers
While contracts that contain liability waivers are “disfavored in law and . . . subjected to close judicial scrutiny,” liability waivers are nonetheless enforceable in New Jersey “unless such provision proves adverse to the public interest.” Stelluti v. Casapenn Enters., LLC, 1 A.3d 678, 688 (N.J. 2010).
“As a threshold matter,” New Jersey courts will examine whether the exculpatory agreement “reflect[s] the unequivocal expression of the party giving up his or her legal rights that this decision was made voluntarily, intelligently, and with the full knowledge of its terms.” Id. at 689-90. A party that signs a written contract “is presumed to understand and assent to its terms, unless fraudulent conduct is suspected.” Id. at 690. However, “any doubts or ambiguities as to the scope of the exculpatory language must be resolved against the drafter of the agreement and in favor of affording legal relief.” Marcinczyk v. N.J. Police Training Comm’n, 5 A.3d 785, 789 (2010) (citation omitted).
If the intent of the contract is clear, the liability waiver will be enforceable only if “(1) it does not adversely affect the public interest; (2) the exculpated party is not under a legal duty to perform; (3) it does not involve a public utility or common carrier; or (4) the contract does not grow out of unequal bargaining power or is otherwise unconscionable.” Id. at 689 (adopting test from Gershon v. Regency Diving Ctr., Inc., 845 A.2d 720, 726 (N.J. App. Div. 2004)). The factors outlined by the California Supreme Court in Tunkl v. Regents of the University of California “can provide additional guidance when applying [this] test.”
i. Public Duty and the Legal Duty to Perform
To evaluate whether enforcing the exculpatory clause is in the public interest, New Jersey courts must balance the benefits of allowing parties to freely contract against the harms of encouraging negligent behavior. Stelluti, 1 A.3d at 694. This public interest inquiry is often merged with the second part of the Gershon test, which looks at the party’s legal duties. Id. at 691. Thus, exculpatory agreements are not in the public interest if they “release liability for statutorily imposed duties.” Id.; see also McCarthy v. Nat’l Ass’n for Stock Car Auto Racing, Inc., 48 N.J. 539, 542, 226 A.2d 713, 714 (1967) (owner of a stock car race could not contract away liability for failure to follow New Jersey’s safety regulations). Courts will also weigh common law duties to determine whether enforcing an exculpatory clause is in the public interest, although the mere existence of a common law duty does not mean that duty cannot be waived by contract. Stelluti, 1 A.3d at 690.
New Jersey courts are more likely to conclude that enforcing a liability waiver is in the public interest if the plaintiff was injured while participating in an activity where the risk of injury was inherent and well-known. For example, New Jersey’s Supreme Court has concluded that a health club or gym can often enforce a contract that releases it from liability for negligent acts, including failure to maintain safe exercise equipment, but not for grossly negligent or reckless acts. Id. at 693-694. The court relied on the fact that the common law duty of businesses to maintain safe premises is more lenient under New Jersey law for activities that involve physical exertion, because injury is a “common and inherent part” of exercising. Id. at 691, 694 (explaining that businesses must only avoid “reckless[ness] and gross negligence” in this context).
On the other hand, liability waivers may be unenforceable for businesses that do not operate activities with an inherent risk of injury, like “restaurants, malls, and supermarkets.” Id. at 694. By extension, New Jersey’s Appellate Division has refused to enforce liability waivers for gyms, health clubs, and other risky activities if the plaintiff’s injury resulted from risks that are common to many businesses, rather than from the added risks that come with physical exertion. Compare Walters v. YMCA, 96 A.3d 323, 326–27 (N.J. App. Div. 2014) (refusing to enforce liability waiver where plaintiff had slipped on stairs in gym because “[t]he inherently risky nature of defendant’s activities as a physical fitness club was immaterial to this accident”); Crossing-Lyons v. Towns Sports Int’l, Inc., No. A-3908-15T3, 2017 WL 2953388, at *2 (N.J. App. Div. July 11, 2017) (refusing to enforce liability waiver where plaintiff tripped over gym equipment on while walking to meet trainer); and Martin v. Hudson Farm Club, Inc., No. CV 18-02511, 2021 WL 6265499, at *11 (D.N.J. Dec. 31, 2021) (refusing to enforce liability waiver where plaintiff was injured travelling on wagon between shooting locations at clay shooting range); with Skarbnik v. Life Time Fitness, Inc., No. A-3229-19, 2021 WL 3923270, at *4 (N.J. App. Div. Sept. 2, 2021) cert. denied, No. 086287, 2022 WL 291993 (N.J. Jan. 28, 2022) (enforcing liability waiver where plaintiff slipped on sweaty floor in hot yoga room because that was “not the type of accident that could have occurred in any business setting”).
New Jersey courts have also specified several instances where exculpatory contracts are unenforceable for public policy reasons. New Jersey courts will not enforce “[a]n agreement containing a pre-injury release from liability for intentional or reckless conduct.” Stelluti, 1 A.3d at 689. Public entities cannot “condition the provision of a public service on the recipient’s execution of a waiver of liability,” because doing so “violates the public policy expressed by the Legislature in the Tort Claims Act.” Marcinczyk, 5 A.3d at 790. Furthermore, “exculpatory agreements for negligence claims violate public policy in a variety of settings, such as in residential leases . . . or in connection with rendering professional services.” Hojnowski v. Vans Skate Park, 901 A.2d 381, 387 (2006) (citations omitted). Finally, a liability waiver signed by a decedent is not enforceable against a wrongful death claim brought by the decedent’s heirs, unless “the agreement . . . [manifests] the unequivocal intention of such heirs to be so bound.” Gershon v. Regency Diving Ctr., Inc., 845 A.2d 720, 727 (N.J. App. Div. 2004) (arguing that enforcing a liability waiver signed by the decedent would violate the public policy underlying New Jersey’s Wrongful Death Act, N.J. Stat. Ann. § 2A:31-1 (West 2021)).
ii. Unequal Bargaining Power
Liability waivers are unenforceable if they are procedurally unconscionable. Stelluti, 1 A.3d at 688. However, the New Jersey Supreme Court has held that a plaintiff cannot demonstrate procedural unconscionability simply by establishing that the agreement was an adhesion contract and the plaintiff was “a layperson without any specialized knowledge about contracts generally or exculpatory ones specifically.” Id. Courts may consider whether the injured party could have avoided the waiver by seeking out similar services elsewhere and whether they were under time pressure to sign the agreement and therefore did not have an opportunity to seek advice. Id.
B. Liability Waivers Signed By Parents on Behalf of Minor Children
The New Jersey Supreme Court has held that “the public policy of New Jersey prohibits a parent of a minor child from releasing a minor child’s potential tort claims arising out of the use of a commercial recreational facility.” Hojnowski, 901 A.2d at 386. While the court noted that “volunteer, community, and non-profit organizations involve different policy consideration,” it remains unclear whether liability waivers are enforceable in those settings. Id. at 389. However, the New Jersey Legislature has afforded civil immunity from liability to “certain volunteer athletic coaches, managers, officials, and sponsors of non-profit sports teams.” Id.
If a child has an existing claim, parents can only consent to settle that claim with the approval of the court. N.J. Ct. R. R. 4:44-1.
Last updated 03/2022
This assessment of the enforceability of waivers has been prepared by non-lawyer law students and does not constitute legal advice.