Release Clauses

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 What Is a Contract?

A contract is a legally binding arrangement between two or more parties. A contract supplies particulars of what the parties agree to perform or exchange. A contract may be in written or oral form. In most circumstances, to be legally binding, a contract must be in writing and signed by all parties involved.

Courts typically demand three things for a contract to be enforceable:

  • Mutual assent, or agreement to the contract terms;
  • A proper offer and acceptance; and
  • Consideration.

Contracts are deemed the basis of the business world. They may be straightforward or very elaborate. Examples of contracts include employment agreements, real estate acquisition agreements, and insurance arrangements.

Contracts must be entered into by all parties willingly. All parties signing the contract must do so of their own free will and not under duress. Contracts can be used whenever parties want to document an agreement to ensure all parties’ rights are covered.

What Is a Release Clause?

A “release clause,” or simply, a “release,” is an agreement between parties saying that one of the parties will relinquish their privileges to a legal claim. It typically states that the party relinquishes or gives up its right to sue or bring a lawsuit against the other party. The signing party must comprehend that they will not be able to file a lawsuit for any losses or injuries concerning the release.

Releases may be signed as a separate contract, or they may be included in the provisions of an agreement. Signing a release can harshly restrict legal remedies down the road.

When Are Release Clauses Used?

Release clauses can come in various forms and may be used for various goals. Release clauses are used by property owners or business owners trying to restrict their liability for injuries suffered by their clients.

Release clauses are also used for customers to participate in a sporting event or a risky event such as skiing. The property owner will direct the client to sign a release clause, recognizing that the particular type of event is treacherous and may cause some injury. When the client signs the release clause, they assume the risk of injury, limiting their rights to bring a claim for an injury.

Generally, releases are used in the following claims:

  • Personal Injury: Often, a release clause will accompany sports involving a high risk of injury. For instance, in extreme sports such as rock climbing, skydiving, or hang gliding, a hired instructor may instruct customers to sign a release form to avoid being held responsible for their injuries.
  • Construction Projects: Construction contractors often use a variety of release clauses that stop the parties from filing a legal claim in the event of a dispute.
  • Business Contracts: Sometimes, an agreement between two business partners will contain a release clause. If there is a dispute in the business contract, the release clause will usually lead the parties towards alternative relief methods such as negotiation or mediation.

How Do I Know if I’ve Signed a Release Clause?

A release clause will usually be an express waiver that the client will sign before engaging in some activity on the property. The property owner or property facilitators will warn clients of standard hazards associated with the property activity.

Standard examples of circumstances where you may have signed a release clause include:

  • Ski resorts
  • Fitness/ Health Clubs
  • Recreational Boating Trips
  • Residential or Commercial Leases
  • Gyms or Fitness Centers

Many establishments also have implied waivers of liability. An implied waiver is applied when a person enters a property knowing that the activity they are about to do poses a risk of injuries, such as ice skating or skiing. An implied waiver does not require the client to sign a release clause, unlike an express waiver.

Are Release Clauses Always Enforceable?

Release clauses are not always enforceable. If you have signed a release clause and have been hurt in connection with the activities for which you signed the release, you may still be able to sue. Although state and federal courts vary slightly, most agree that to be enforceable, the release clause must be effortlessly readable and intelligible to non-lawyers.

The courts also assess whether the release clause that the client signed covers the particular injury or damage that the injured individual suffers. For a waiver or release clause to be enforceable, the waiver must be apparent to the property’s client. This may require the release clause to be evident and expressed to the client, and they must know what they are signing off.

Can I Bring a Negligence Claim If I Was Injured?

The answer to this question depends upon the state’s law in which the accident happens. Some states hold that facilities cannot release themselves from liability for their negligence because they wouldn’t have any motivation to encourage safety. Other states hold that if the release clause completely, clearly, and unambiguously states that the user is releasing the premises from liability for negligence, it should be enforceable.

If the release clause that was signed did not cover the injury or damage that was suffered, the courts would assess whether the customer waived their privilege to bring a claim for all types of injury or damage of just individual injuries.

What Are Real Estate Release Clauses?

It should be mentioned that the term “release clause” is also widely used in connection with real estate transactions. Yet, in real estate law, a release clause does not usually refer to relinquishing the right to sue. Rather, real estate release clauses encompass two distinct types of agreements:

  • Buyer Allows Seller to Seek Other Offers: Sometimes, a buyer accepts an offer but agrees to let the seller seek other offers for a limited time. Therefore, the buyer “releases” the seller for a short time frame to find better offers. These are also known as “72-hour clauses,” as the seller is usually only given 72 hours to locate another buyer.
  • Mortgages: Another kind of release clause in real estate refers to mortgages. A mortgage release clause permits a portion of the property to be released from the mortgage according to the amount of payment that has already been made.

What Laws Govern Release Clauses?

A release clause is a contract between the parties. Thus, release clauses are controlled by the law of contracts. This means that a definitive agreement in a release clause is legally binding on the parties.

To be enforceable, the release clause must meet all the requirements for a proper contract, such as:

  • The parties are capable of contracting (i.e., of legal age and mental capacity)
  • The parties consent to the clause (cannot be formed under coercion or through force)
  • The subject matter of the agreement is not criminal
  • There is a valid offer and acceptance
  • The clause is supported by sufficient consideration

What most release clauses do is prevent litigation involving the contract’s subject matter. Yet, if there is a conflict about the enforceability of the release clause itself, the parties may confer with a judge for clarification.

According to doctrines of contract law, the parties’ intentions regarding the release clause will be specified as much as possible from the agreement itself. In some instances, the court may view other factors to determine the parties’ intentions, such as their previous dealings.

Do I Need a Lawyer for Issues With a Release Clause?

Release clauses are agreements and therefore have a binding effect on the parties. If you have problems regarding a release clause, you should consult with a contract lawyer specializing in contracts.

If you are forming an agreement and wish to include a release clause, your lawyer can help draft the clause for you. The expert advice of an attorney is the best way to settle any conflicts or arguments over releases.

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