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TeachMeFinance.com - explain Exculpatory Clause exculpatory clause -- that part of a written agreement that relieves one party to the agreement of liability as a result of actions (or lack of actions) performed in the course of executing the terms of the contract. In a trust agreement, an exculpatory clause relieves the trustee of liability resulting from any act performed in good faith under the trust agreement. In a lease, the exculpatory clause relieves the landlord of liability for personal injury to tenants or damage to tenants' property. another definition... Exculpatory Clause -- 1. A contractual clause that releases one party from liability in case of wrong doing by the other party involved. 2. A contractual clause which excuses a trustee from liability where he executes a power in good faith. Copyright © 2005 by Mark McCracken, All Rights Reserved. TeachMeFinance.com is an informational website, and should not be used as a substitute for professional financial or legal advice. TeachMeFinance.com and its owner recommend consultation with a professional financial advisor prior to any investment or financial decision. Please read our disclaimer.