Exculpatory Provision

What Does Exculpatory Provision Mean?

An exculpatory provision is a clause in a contract that absolves one party of liability or prevents that party from being sued. Such a clause is only recognized by the court if it is deemed reasonable and not unconscionable.

Insuranceopedia Explains Exculpatory Provision

Although you may not be familiar with the term, you likely encounter exculpatory provisions nearly every day. For example, when you visit a diner and see a sign stating that you should take care of your belongings because the establishment is not responsible for their loss, that sign represents an exculpatory provision. In this case, the diner absolves itself of liability for theft or lost items on its premises.

However, certain conditions must be met for such provisions to be enforceable. In the case of the sign, it must be clearly expressed and sufficiently conspicuous. Additionally, the details of the provision must be considered reasonable. For instance, while a restaurant may limit its liability for theft, it is unlikely that it could enforce an exculpatory provision absolving itself from liability for food poisoning.