General release: Overview, definition, and example
What is a general release?
A general release is a legal agreement in which one party waives or relinquishes any future claims, demands, or causes of action against another party. It is a broad and comprehensive release, often used to settle disputes or terminate agreements, and typically covers all claims or issues that could be raised between the parties, whether known or unknown, arising from past actions, events, or transactions.
The purpose of a general release is to prevent further legal action by the releasing party, ensuring that no future claims related to the matters covered by the release can be brought against the other party. This release is often signed after a settlement, negotiation, or dispute resolution, allowing both parties to move forward without the threat of future litigation.
Why is a general release important?
A general release is important because it provides legal certainty and closure for both parties. It protects the released party from any future lawsuits or claims that could arise from the actions or relationships covered by the release. By signing a general release, the party relinquishing their rights ensures that they cannot later reopen the matter in court, which helps avoid the potential for lengthy or costly legal disputes.
For businesses, a general release helps to finalize disputes or end contractual relationships, offering peace of mind that no further legal claims will emerge. It is a key tool in contract settlements, employment terminations, and other situations where disputes have been resolved.
Understanding a general release through an example
Imagine an employee leaves a company and agrees to a severance package. As part of the settlement, the employee signs a general release, which waives any future claims related to their employment, including claims of wrongful termination, unpaid wages, or discrimination. In return, the employee receives a severance payment. The general release ensures that the employee cannot file a lawsuit against the company in the future related to their previous employment.
In another example, two businesses resolve a commercial dispute by agreeing to a settlement. As part of the settlement agreement, both parties sign a general release, stating that they will not bring any further legal claims against each other regarding the issues involved in the dispute. This prevents either party from filing a lawsuit in the future based on the resolved matter.
An example of a general release clause
Here’s how a general release clause might look in a contract:
“In consideration of the payment of [insert amount], the undersigned hereby releases and forever discharges [party being released], its affiliates, officers, directors, employees, and agents from any and all claims, demands, actions, or causes of action, known or unknown, arising out of or related to [specific matter or dispute]. This release shall apply to any and all claims, whether now known or hereafter discovered, and shall be binding on the undersigned and their respective heirs, successors, and assigns.”
Conclusion
A general release is an essential legal tool used to settle disputes and prevent future claims between parties. It allows one party to relinquish any future legal claims against another party, providing closure and finality to the matter at hand. For businesses, using a general release can prevent the risk of future litigation and offer protection from claims that may arise after a settlement or agreement. It is an important provision for resolving disputes, contract terminations, and other situations where a clean break is needed.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.