Scope of Release Clauses

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What Is a Release?

A Release, or “Release Clause”, is a type of agreement wherein one party relinquishes or gives up their right to sue.  Generally, release clauses are governed by contract law.  Therefore they are considered to be final expressions of the parties’ intentions regarding dispute resolution. 

Release clauses may either be oral or written, though it is always much better if they are reduced to writing.  In order to be valid, a release clause should fulfill all the requirements for a basic contract.  The release form may either be a separate writing or it can be contained as a provision within the broader contract.

What Is the Scope of a Release Clause? 

The scope of a release clause can be very broad.  Most typical release clauses have to do with one party forfeiting their right to sue in the event of an injury or economic loss. 

However, release clauses may also be used to require one party to surrender any legal right, so long as it is not illegal to enforce such limitations.  For example, a release clause may require a party to forfeit their legal right to assign their duties under a contract.

A release can cover either general or specific rights.  An example of a general release is where one party agrees to surrender the general right to file a lawsuit over a dispute.  In such situations, the surrendering party would then need to resort to other types of dispute resolution such as mediation.

An example of a release of specific rights is the example mentioned above, where the party surrenders their right to assign a contract duty.  In this case the party could still file a lawsuit since the release only covers a specific legal right and not the general right to sue.  It is up to the parties to decide whether the release clause will be general or specific in nature.

How Do Courts treat General versus Specific Releases?

If a release clause is general, then the release will prevent the surrendering party from filing a lawsuit.  On the other hand, a release that is specific in nature will be limited only to the specific rights that have been addressed in the clause. 

Any other types of legal rights are considered to be outside of the scope of the specific release.  Any rights not specifically mentioned are not considered to be waived, and may be claimed by the parties to the contract.  In other words, if a release clause contains specific instructions, then only those specific rights will be affected. 

When a contract contains both general and specific instructions, a court will usually prefer the general language over the specific language.  However, if possible the court will attempt to interpret the language of the release clause so that the general and specific instructions harmonize with one another.  If this is not possible, then additional evidence may not be considered by the court; instead a jury will resolve any factual disputes over the release clause.

Do I Need a Lawyer for Conflicts over Release Clauses?

As you can tell, release clauses should be drafted in a manner that is very clear and unambiguous in order to avoid future conflicts.  Both parties must understand the exact effects of the release clause in order for it to be enforceable.  For these reasons, it is important that you consider hiring a lawyer if you will be working with a release clause.  The laws governing releases may vary slightly by jurisdiction, and an experienced contracts attorney can help you understand the laws in your area.

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Last Modified: 06-11-2014 12:44 PM PDT

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