The Contract Principle of ‘Waiver’ and When it Can Be Void: OceanGate’s Titan Submersible
Written by: Caitlin Hamilton
Many of us are familiar with the concept of a liability waiver. When entering an amusement park, gym, or taking part in an excursion or related activity, the concept of signing away rights isn’t foreign to the human experience. Waivers are a general principle of contract law that allows individuals to enter into voluntary agreements that can usually trump policy considerations enforceable in tort law. That said, waivers are not guaranteed to hold up in a court of law. This matter is now at the forefront after remains of OceanGate’s submersible, the Titan, were found, indicating a fatal implosion.
Before boarding the Titan, passengers had to sign a three-page waiver, in the form of a release, that acknowledged the absence of any regulatory body certification, risk of property damage, emotional trauma, severe injury, and death to the passenger. The release also contained a clause that released OceanGate and its affiliates from liability if an accident were to occur. However, courts typically approach waivers with heightened scrutiny as the exclusion of liability isn’t taken lightly. If a waiver isn’t iron-clad, meaning clear, in plain language, highlighting every risk, and encompassing the ‘specific’ nature of contracts, courts can choose to uphold policy considerations in tort law versus the substance of a liability waiver.
In addition to contractual language, other factors that will be considered include whether or not information was withheld from the passengers, the awareness the passengers had of the risks they were signing off on, and the governing state laws. As mentioned, courts aren’t always preferential to waivers, and while most states recognize liability waivers, others do not. While some states have restrictions on liability waivers, states such as Louisiana, Montana, and Virginia void them with seldom exceptions. However, OceanGate’s release includes a clause that stipulates that any dispute shall be resolved in the courts of the Bahamas, where the company is officially registered. If the Bahamas looks negatively on releases, families may be successful in a litigation attempt. However, if the Bahamas recognize the merit of releases, families may not want to sue in the Bahamas, which would then render a jurisdictional problem. Hence, when signing any contract or liability waiver, it is important to assess if there is a clause stipulating jurisdiction or arbitration, as that can affect the outcome of a trial.
While waivers can weigh against other factors, virtually all waivers cannot shield liability from intentional acts or gross negligence. Hence, if the tragedy happened as a result of an intentional act to harm, the waiver would be void. Furthermore, if there is evidence of hazardous construction that demonstrates an extreme disregard for safety, that could constitute gross negligence, and liability waivers only cover ordinary negligence. Although there were safety measures in place on the Titan, if there is evidence that a design of the Titan strayed completely away from reasonable care, the waiver can be void.
While the Titan submersible illustrates an example, the enforceability of a liability waiver or contract hinges on many of the factors listed above, which can manifest in business dealings and everyday life.