Why Do Churches Need Written Contracts, Let Alone Waivers!!!

Some believe a simple hand shake between the church and the vendor is all that is needed to form a perfectly construed, binding contract. They believe that as long as you have a good relationship with the vendor or because the vendor is a member of the church that you don't have to enter into a written contract. Litigation is born out of the failure to have a fully, executed written contract with insurance requirements attached to it.

Lawsuits arise when the expectations of the parties are not put into a detailed document called a contract. Black's Law Dictionary defines a contract as "an agreement by which one person obligates himself to another to give, to do or permit, or not to do something expressed or implied by such agreement." A major problem is when the details of the contract are only in the heads of the parties and not written on paper. At a minimum, every contract should clearly state what the job will include, how the work will be done, be specific as possible regarding what materials will be used or services/products rendered, how much the job will cost, when payments will be made, specify who will obtain any necessary permits, the timeframe for job completion and the warranty. Other items should be included but the aforementioned items are a good minimum start. Along with the contract, the vendor should supply a certificate of insurance; and the declarations page with the endorsements pertaining to the church being an additional insured on the commercial general liability portion. As long as the contract does not require or cannot be construed to require indemnification (meaning the action of compensating for loss or damage sustained) from one's own negligence, the church should be listed as an additional insured. Never sign a contract until all of the blanks have been filled in, even if not applicable (in such cases, put N/A).

There are many types of contracts from construction contracts, event contracts, and product/service contracts to waivers. It is important that you have an attorney draft and/or review these legal documents which will bind the ministry.

A Colorado court recently held that a "waiver and release document which purported to release the church from responsibility for any liability that might result from participation in an off-site church event attended by patrons, did not release church from liability for injuries suffered by a minor patron when she collided with rock on frozen lake while being towed on inner tube by all-terrain vehicle, because the agreement did not contain any information describing the event activities or associated risks." The court concluded that since the parent had not been properly informed in writing (emphasis added) about the dangers associated with the activity, the release was ineffective. Wycoff v. Grace Community Church of the Assemblies of God, 251 P.3d 1260
(Colo. Ct. of App., Div. VI 2010).

The Michigan Supreme Court held in a 2010 case that a "waiver of liability signed by father on behalf of minor child before child attended party at indoor play area was unenforceable, and therefore did not bar child's negligence action against operator of indoor play area arising from injuries sustained when child jumped off a slide and broke his leg; father had no authority to contract on behalf of child." Woodman v. Kera, 785 N.W.2d 1 (Sup. Ct. of Mich. 2010). According to the court in Woodman, the waiver the parent signed was meaningless and therefore the operator of the indoor play area could not use the waiver as a defense. The court held the parent could not sign a document that would bind their child. It had the effect of making waivers void of power. Many felt the court was wrong in its opinion. In an attempt to overturn the action of the Michigan Supreme Court regarding waivers, Gov. Snyder signed 2011 PA 61 which allows a written parental waiver if a child is hurt in the course of a game (with some limitations and parameters). What this means is that Gov. Snyder and supporters of 2011 PA 61 felt that parents should be allowed to sign appropriately written waivers which will be upheld in a court of law.

However, courts typically disfavor release forms, which means that in crafting such form churches should consider the following limitations and suggestions:

  1. Consult your insurance agent and your local attorney when drafting releases;
  2. Don't try and waive away all liability because the courts narrowly construe release forms against churches. Courts have repeatedly said its ok for parents to "release or waive the child's prospective claim for negligence"; but not for "willful and wanton, reckless, or grossly negligent acts or omissions."
  3. To be enforceable, release forms must be voluntarily entered into which means, amongst other things, that you should give participants or their parents as soon as possible in order for them to read about the associated risks and decide whether or not pay and/or participate in the event.
  4. To be enforceable, make sure the language in the form or associated documents are clear about the specific risks that are being released.

This is not an exhaustive list of things to consider. The rules/laws and interpretations of such often differ from state to state and from court to court, depending on the fact pattern, temperate of the judge(s) and the laws within that state.

This article is written by Attorney Tracey Lee

Legal Counsel for Word of Faith