What Is a Release?
What Is a Release?
A release is a contractual provision – or a standalone agreement – in which one or both parties agree to give up their right to bring future legal claims against the other arising from specified events or a defined period of time. Releases are most commonly found in settlement agreements resolving business disputes, in membership interest purchase agreements where departing owners release all claims against the company and the remaining owners, and in employment separation agreements.
Russo Law LLC drafts and negotiates release provisions for businesses and business owners throughout New York and New Jersey.
What Does a Release Cover?
A release typically specifies:
- Who is releasing claims – the releasing party or parties
- Who is being released – the released party or parties, which may include affiliated entities, officers, directors, employees, and agents
- What claims are released – the scope of claims being released, whether known or unknown, arising from a specific transaction, relationship, or time period
- Exceptions – claims that are specifically carved out and not released, such as obligations created by the settlement agreement itself or future claims arising after the release date
Mutual vs. One-Sided Releases
A mutual release requires each party to release the other – both sides give up their right to bring future claims arising from the specified matter. A one-sided release only releases one party. In settlement agreements resolving business disputes, mutual releases are common because both parties typically want finality. In other contexts, such as a business sale, the release structure depends on the specific facts and negotiation.
Frequently Asked Questions
What is a general release?
A general release broadly releases all claims – known and unknown – arising from the relationship or subject matter up to the date of the release. General releases are common in settlement agreements where both parties want comprehensive finality. Because a general release can extinguish claims a party may not even be aware of at the time of signing, the scope of any release should be carefully reviewed before execution.
What is the difference between a release and an indemnification?
A release extinguishes existing or potential claims between the parties – the releasing party gives up the right to sue. An indemnification is a promise to compensate the other party for future losses or third-party claims. They serve different purposes and often appear together in the same agreement.
Are releases enforceable in New York and New Jersey?
Releases are generally enforceable in both states between commercial parties, provided they are clear, unambiguous, and supported by consideration. Courts in New York and New Jersey will generally enforce a release according to its terms. However, releases that attempt to release claims for fraud, gross negligence, or intentional misconduct may face enforceability challenges. Whether a specific release is enforceable requires a fact-specific legal analysis. See also: Cornell LII: Release.
Schedule a Free Consultation
If you need a release drafted, reviewed, or negotiated in New York or New Jersey, call 929-262-1101 or schedule a free consultation with Russo Law LLC.
The information on this page is general in nature and does not constitute legal advice. Every situation involves unique facts, and no specific strategy or recommendation can be made without a full review of your circumstances.