Release Clause Requirements

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What are Release Clauses?

Release clauses, or “releases”, are agreements between two parties wherein one party surrenders their rights to file a lawsuit.  A release clause is essentially a contract where the surrendering party agrees not to initiate a legal claim in the event of a loss or injury.  Oftentimes the release clause will prescribe an alternative method for resolving disputes, such as mediation or alternative dispute resolution (ADR).

The use of a release clause is fairly standard practice in many situations, such as in a contract for a construction project or high risk activities such as skydiving.  Since they are contracts, release clauses must conform to all the requirements of a valid contract.

What are the Requirements for a Release Clause to be Valid?

A release clause may either be agreed to orally or signed as a written document.  There is no particular form that a release clause must take; however, the agreement must be clear and unambiguous, so it is better if the agreement is finalized in writing. 

In general, the requirements for a valid release clause are similar to those of any contract:

It is especially important that a party understand that they are signing a release clause.  Release clauses are sometimes created as a separate agreement, but oftentimes they are embedded within the main contract.  Thus, it sometimes happens that a person signs a contract not knowing that it included a release clause.  For this reason, the parties should fully understand the entire contract before signing.

When is a Release Clause considered to be Void?

Release clauses are governed by contract law.  Under contract law, there are certain factors that may render a release clause void.  These factors usually involve the issue of consent, and may include:

In addition, a release clause may be deemed unenforceable if it is contrary to public policy.  A release violates public policy if:

Thus, it is often recommended that release clauses be drafted and reviewed by an attorney before they are offered or accepted.  Release clauses must conform to the requirements of law in order to have legal effect.

Do I Need a Lawyer for disputes over a Release Clause?

It is highly advisable to consult with a lawyer if you will be dealing in any way with a release clause.  An experienced contracts attorney can help you draft a release clause if you need one, and they can be available to review the clause if you will be signing one.  Although release clauses can sometimes prevent a lawsuit from being filed, the parties can still seek recourse in court if there is a dispute over the release itself. 

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Last Modified: 02-23-2011 02:55 PM PST

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