exculpatory clause

  

Definition

A provision in a contract under which either of two things is stipulated: (1) one party is relieved of any blame or liability arising from the other party's wrongdoing, or (2) one party (usually the one that drafted the agreement) is freed of all liability arising out of performance of that contract.

An example of an exculpatory clause is a dry cleaner's receipt that includes a disclaimer freeing him or her from any liability for damage to the item to be cleaned during the dry cleaning process. An exculpatory clause may be overruled by courts if found to be unreasonable in the circumstances. See also exclusion clause, exemption clause, and indemnity clause.


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