Protecting oneself is crucial whether it is a business, property owner, or just an individual, be it from injuries, illness, death, or even lawsuits. One specific way a person or an entity can protect themselves from legal disputes is through hold harmless agreements. This specific method is widely used by many industries, but do we know what it really is?
This blog serves as a guide to learn more about hold harmless agreements and the importance of hiring a lawyer when dealing with such contracts.
What Is a Hold Harmless Agreement?
A hold harmless agreement, also known as a hold harmless clause and hold harmless provision, is a clause written into an agreement, protecting one or both involved parties by absolving their legal liability in case of loss, damage, or injury. Such clauses are often used by businesses such as:
- Gyms
- Sports clubs
- Construction companies
- Real estate owners who rent out their properties
What is the Use of a Hold Harmless Agreement?
A hold harmless agreement protects businesses that deal with high-risk activities. When a person signs a hold harmless agreement, it acts as proof that the person is made aware of its risks. Although the agreement does not completely protect the business from liability, in case of a tragedy, the business will not be held completely liable.
For example, if a person wishes to go skydiving, the business will require them to sign a hold harmless agreement. This protects the business in case there is a mishap during the activity that affects the person.
Types of Hold Harmless Agreements
Businesses can opt for specific types of hold harmless agreements, depending on their requirements, such as:
- The business could opt for a general hold harmless agreement to protect their business against legal action related to a specific activity.
- The business could make a service-related hold harmless agreement to protect their business against liabilities that occur when a person performs a specific service.
- The business could make use of property-related hold harmless agreement to protect their business against liabilities that occur when another party is renting or using their property.
What to Keep in Mind When Making a Hold Harmless Agreement
A hold harmless agreement protects the company, but that may not always be the case. The nature and language used in the hold harmless agreement are crucial; if it is unclear or vague, the agreement could be disregarded. Also, if the person who signed the agreement presents a strong argument against it, stating that they were coerced to sign it or that the agreement is fraudulent, it will be considered null and void.
Let’s take a look at a few factors one must keep in mind when making a hold harmless agreement:
- A hold harmless agreement needs to be precise, stating all the facilities and services provided by the business.
- It needs to cover all possible situations that may come up, such as injuries, theft, death, etc.
- The agreement needs to clearly state the possible risks involved, such as injuries and death.
Hiring a Lawyer
Hiring a lawyer is crucial for the person or entity creating the contract as well as the person or entity who is supposed to sign it. Having a lawyer while creating the agreement ensures that there are no errors or gaps that could be a loophole that leads to lawsuits. Only once the lawyer has reviewed and approved the document should it be presented to the other party.
If a person wishes to hold a business accountable but has signed a hold harmless agreement, they must hire a lawyer to better understand their options. Suing or seeking damages after signing a hold harmless agreement depends on various aspects, such as its circumstances and the contents of the contract.
Many businesses overly complicate the language they use in their contracts to confuse the signers. Hiring a lawyer to go through the document can provide the individuals with a better understanding of the terms and possible consequences. Ideally, the contract should be reviewed by a lawyer before the person signs the contract.
