One thing that you can be certain of is that commercial lawyers, as do most other professions, have to learn, understand, and use jargon and terms specific to their field of expertise. Just as doctors, accountants, and veterinarians will use words unique to what they do daily, so will commercial lawyers.
This brings us to the three legal terms within commercial law that we are going to discuss in this article, namely waivers, disclaimers, and exclusion clauses which are all found in contracts or purchase agreements. To many people reading this, they may all seem to mean the same, but as your commercial lawyer will tell you, they most definitely are not.
They will go further and advise that if you confuse these terms, and if, as a result, your business or a business you are dealing with makes a mistake, creates an issue, or if a dispute arises, then it can lead to consequences, some of which are financial, and some may even be legal. For those reasons, we are going to briefly explain what each of the aforementioned terms means and how they differ.
Waivers
Waivers are used in all kinds of circumstances and most certainly within the commercial environment where contracts and agreements between two businesses occur or between a business and an individual. The effect of a waiver within a contract of any kind is that it releases one of the parties to that agreement from specific obligations and liabilities relating to what the agreement is about.
For a waiver to have legal standing, it must form part of a legally binding contract, although it might be that it is a separate document, albeit a key component of the contract. More common in scenarios where there is an element of risk, they are often used to protect the party providing the product or service. Prime examples include a holiday company that provides dangerous activities such as rock climbing, or a new product sample being tested by volunteering participants.
Disclaimers
A disclaimer is another way in which companies providing products or services seek to limit their liabilities. Disclaimers can appear in numerous places such as websites, written contracts, product receipts, and also the instructions which are included with products. A company cannot use disclaimers to simply release them from all liabilities in all circumstances as they have legal obligations applicable to the safety of their goods, for example.
However, disclaimers can be used to release a company from specific types of loss or harm. This can include monetary loss due to the use of their product or service where potential losses are possible in any event. An example is an online course on currency trading which will invariably have a disclaimer concerning any monetary losses accrued by someone following the course’s instructions as the author has no control over how currency markets fluctuate.
As for physical products, a supplier can include a disclaimer related to the misuse or certain uses of their product. An example is a disclaimer related to the safe working load of a van being exceeded and thus damaging the van’s suspension.
Exclusion Clauses
The effect of an exclusion clause is to limit or exclude one party’s liability within certain specific circumstances and these will be included in the contract. Exclusion clauses tend to be narrow and often specify more precisely the nature of the exclusion of any type of liability. Examples are excluding liability for all financial losses, excluding liability related to negligence, or it excluding all liabilities except for those provided by commercial law or other pertaining laws.
Regardless of their wording, exclusion clauses must be seen to have reasonable requirements for them to be enforceable. For example. a car showroom cannot expect an exclusion clause for its warranty on cars that states a maximum weekly mileage of 20 miles to be enforceable.
