Scope of Release Clauses

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 What is a Contract?

Contracts are legally binding arrangements between two or more individuals or entities. Contracts outline the particulars of what the parties agree to exchange or perform.

Contracts may be written or they may also be in an oral form. In the majority of cases, in order to be legally binding, a contract is required to be in writing and must be signed by all of the parties involved.

A court will typically require three elements for a contract to be enforceable, including:

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

Contracts are considered to be the basis of the business world. A contract can be simple and straightforward or it can be very elaborate.

Examples of they contracts an individual may encounter include, but are not limited to:

  • Employment agreements;
  • Real estate acquisition agreements; ad
  • Insurance agreements.

A contract must be entered into by all parties involved willingly. All of the parties and entities signing the contract are required to do so of their own free will and not under duress.

A contract may be used whenever the parties want to document an agreement to ensure all the rights of all are protected.

What is a Release?

Releases, or release clauses are types of agreements where one of the parties relinquishes, or gives up, their right to file a lawsuit. These agreements are, therefore, considered to be final expressions of the intentions of the parties regarding dispute resolution.

A release clause may be in written or oral form. It is important to note, however, that it is always better to have any type of agreement in writing if possible.

In order for a release clause to be valid, it must fulfill all of the requirements for a contract. A release form may either be a separate document or it may be contained as a provision within the overall contract.

What is the Scope of a Release Clause?

The scope of release clauses may be very broad. Typically, a release clause has to do with one party forfeiting the right to file a lawsuit in the event of an injury or economic loss.

A release clause, however, may also be used to require a party to surrender any of their legal rights, so long as it is not illegal to enforce the limitation. For example, release clauses may require one party to forfeit their rights to assign their duties under the contract.

Releases may apply to general rights or specific rights. An example of a general release is a situation in which one party agrees to surrender the general right to file a lawsuit related to a dispute.

In these situations, the surrendering party would be required to use another type of dispute resolution, such as mediation. An example of a release of specific rights occurs when a party surrenders their right to assign their contract duties.

In these situations, the party may still file a lawsuit because the release only governs a specific legal right and not their general right to sue. It is up to the parties involved to determine whether the release clause will be general or specific.

When are Release Clauses Used?

A release clause may come in various forms and may be used to accomplish various goals. A release clause is often used by a property owner or a business trying to restrict their liability for injuries which are suffered by their clients.

A release clause may also be used when individuals participate in sporting events or risky events, for example, skiing. Property owners will direct their clients to sign the release clause, which recognizes that the particular type of event is dangerous and may cause injury.

When an individual signs a release clause, they will assume the risk of injury, which limits their rights to bring a claim for injuries they suffer. In general, releases are used in the following situations:

  • Personal injury: In many cases, a release clause will accompany sports involving a high risk of injury. For example, 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; and
  • Business contracts: In some situations, 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 require the parties to use alternative relief methods such as negotiation or mediation.

How Do I Know if I have Signed a Release Clause?

Release clauses will typically be express waivers that a client will sign prior to engaging in an activity on the property. A property owner or property facilitator will warn clients of the hazards that are associated with the particular activity.

Standard examples of situations in which individuals may have signed release clauses include:

  • Ski resorts;
  • Fitness or health clubs;
  • Recreational boating trips;
  • Residential or commercial leases; and
  • Gyms or fitness centers.

There are also many establishments that have implied waivers of liability. Implied waivers apply when an individual enters a property knowing that the activity they are going to engage in poses a risk of injury, for example, skiing or ice skating.

In contrast to express waivers, implied waivers do not require an individual to sign a release clause.

How Do Courts Treat General versus Specific Releases?

A general release clause will prevent the surrendering party from filing a lawsuit. In contrast, a specific release will be limited to those specific rights which were addressed in the clause.

Any other legal rights are considered to be outside of the scope of the specific release. Any rights which are not specifically mentioned will not be deemed waived and may be claimed by the parties to the contrast.

In other words, if release clauses contain specific instructions, only those rights specifically mentioned will be affected. If a contract contains both general and specific instructions, the court will typically prefer the general language over the specific language.

If possible, however, a court will attempt to interpret the language of a release so that the general and specific instructions are in harmony with one another. If this cannot be accomplished, additional evidence may not be considered by the court.

Instead, a jury will resolve any factual disputes which arise regarding the release clause.

Do I Need a Lawyer for Conflicts over Release Clauses?

As noted above, release clauses must be drafted clearly and unambiguously in order to avoid a dispute. The parties to the release clause must understand the effects of the release clause in order for it to be enforceable.

If you have any issues, questions, or concerns related to a release clause, it may be helpful to consult with a contract attorney. Your attorney can advise you of the laws governing release clauses in your area.

If you are unsure regarding the rights you will be signing away in a release clause, it is important to have an attorney review the clause or contract and advise you on these issues. If you are drafting a release clause, your attorney can help ensure that it will be legally enforceable.

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