Release Clause Requirements

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What Are Release Clauses?

Release clauses, or “releases,” are agreements between two parties wherein one party essentially surrenders their rights to file a lawsuit.  Thus, a release clause is basically 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.

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. However, given the nature of disputes, most oral release clauses ultimately bring both of the parties to court anyway. There is no particular form that a release clause must take; however, the agreement must be clear and unambiguous, so, again, it is best practice to get the agreement 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:

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

It is highly advisable to consult with a contracts attorney or business 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, and only a lawyer will be situated to efficiently handle that for you. 

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Last Modified: 08-21-2014 04:52 PM PDT

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