Exculpatory clauses

An exculpatory clause is a contract term that excludes or limits a party's liability, for example for negligence, certain types of loss, or amounts above a cap. It is also called an exclusion or limitation of liability clause. Courts enforce these clauses if they apply on their terms, but may decline to do so in limited circumstances.

How BC law treats it

Canadian courts apply the framework in Tercon Contractors Ltd v British Columbia, 2010 SCC 4: whether the clause applies on its proper interpretation, whether it was unconscionable when made, and whether there is an overriding public policy reason not to enforce it. BC courts frequently uphold personal injury waivers (Loychuk v Cougar Mountain Adventures Ltd, 2012 BCCA 122).

What it means for your business

A business should use clear, prominent exclusion clauses and bring them to the other party's attention before the contract is made.

Risks and common mistakes

A vaguely worded or hidden clause may be interpreted narrowly or found not to form part of the contract.

For the full explanation, see our entry on Exclusion clauses.

General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.