A contractual provision purporting to excuse a party from liability for negligence is called?

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Study for the Chartered Property Casualty Underwriter 530 Exam with flashcards and multiple choice questions. Each question has hints and explanations to enhance your understanding and prepare you thoroughly.

Multiple Choice

A contractual provision purporting to excuse a party from liability for negligence is called?

Explanation:
Exculpatory clause In contract law, an exculpatory clause is a provision that tries to release a party from liability for negligence. It shifts the risk by waiving or limiting the right to sue for injuries or damages caused by that party’s negligence. This directly matches the idea of a contract attempting to excuse liability for negligence, which is why it’s the correct term. The other terms refer to different concepts: a noncompete agreement restricts competition; insurable interest relates to who can insure a risk; accord and satisfaction is a settlement that discharges an obligation through a new performance.

Exculpatory clause

In contract law, an exculpatory clause is a provision that tries to release a party from liability for negligence. It shifts the risk by waiving or limiting the right to sue for injuries or damages caused by that party’s negligence. This directly matches the idea of a contract attempting to excuse liability for negligence, which is why it’s the correct term.

The other terms refer to different concepts: a noncompete agreement restricts competition; insurable interest relates to who can insure a risk; accord and satisfaction is a settlement that discharges an obligation through a new performance.

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