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This Agreement is entered by and between Jonas Adam, individually or collectively as the "Signee" and Jane Smith, as the "Signer", together referred to as the "Parties".
The Contract is dated [the date both parties sign].
The Parties agree that the following agreement is dependent on the terms presented as follow:
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A release agreement is an enforceable legal contract that formalizes a promise between two parties for one or both of them to not start or continue pursuing legal claims against the other. Typically a release agreement will outline some sort of compensation for not pursuing this legal action.
So, one party (known commonly in these agreements as the “releasee”) gives consideration (which is often financial in nature) to another party (the releasor). In exchange for the releasor agreeing not to press charges, sue, or in any other way continue legal action, they receive the consideration.
If one party (an individual or company) has caused some harm or potential harm to another party (again, either an individual or company), then they could be concerned that that second individual could pursue legal action against then as compensation for that harm or wrong doing. To protect themselves proactively against that potential legal action, they would seek to use a release agreement to essentially compensate that second individual to never pursue that action.
A release agreement has several specific terms that are critical to filling out and understanding these agreements. These terms are:
There are few explicit restrictions on what can or cannot be offered as consideration. Individual and companies will offer a variety of things for consideration, depending on the circumstances, but the most common one is definitely money, or financial consideration. This can be a one time or ongoing payment in cash, stock, or some other financial instrument. Depending on the size of the consideration and its conditions, the consideration could also potentially be paid over time in installments.
While purely financial consideration is the most popular form of consideration, it’s not the only one. Anything of value, which is broadly defined, could be used as a form of consideration to satisfy the requirements of a release agreement.
Consideration in release agreements could be anything from a cash and stock, as mentioned, to physical goods, such as the title to a house or car, to services, broadly defined. Really anything that one party can give to another and that the second considers a valuable enough trade for not pursuing legal action is sufficient as it will satisfy the requirement of consideration.
However, it’s important to note that both parties should be very clear in confident in what consideration they’re requesting and giving, or able to give. If the consideration is later found by a judge or jury to be less than was expected in some way (either because it was given or given fully, or because it was defective or not performed properly in the case of a service), then the consideration itself may be considered invalid and the release agreement itself invalidated.
A release agreement is itself can be very general, but there are several situation specific releases that we will go into detail on. These are an activity waiver and release, a release for damage to personal property, a debt repayment release (either full or partial), a mutual release, and a personal injury release. Below we’ll explain the details and considerations of each of these.
This is a very common type of waiver release agreement that many people have likely signed in their lives. It’s an agreement between two parties that releases the party providing an activity (which we explain below) from liability claims from an individual that wishes to participate in the activity. The activity participant is often giving us all future claims against the other party, which is different from other release agreements which are more focused on past or present liabilities.
Activity waivers and releases are most often used by businesses that provide a service that can be potentially dangerous to the participants. In the event that the participant is injured by the activity, that business wants to protect itself from any legal ramifications. As an example, a theme park may ask that all visitors, especially those who are riding rides or otherwise partaking in vigorous activity, sign a waiver to protect themselves from an injury, death, or other accident (such as personal property damage) as a result of the individual being in the park.
There are many other cases where a business would want an individual to sign a release waiver to avoid potential legal action resulting from an accident or other issue while engaging in a dangerous activity. Some examples of this include (but are not limited to): a biking waiver, a boating waiver, a bungee jump or other extreme sport waiver, a hiking or camping waiver, a swimming waiver (for pools as well as oceans, rivers, and lakes), a waiver for rental and use of equipment like a dirt bike, ATV, snowmobile, or quad bike. Waivers are often required for activity destinations such as theme parks, zoos, amusement parks, petting zoos, paintball venues, hunting areas, and even sporting events.
This is another common release agreement where one party that is owed money agrees to accept less than the otherwise legally required amount of money but still settle the debt. This specific type of release should only be used in the case that there is a genuine and running dispute over the value of something.
To take an example, let’s say that Acme Inc hired a consultant to build a marketing campaign for them and the consultant quoted Acme $10,000 for the work. However, several weeks later when the consultant delivers the work and, not only is it not up to the expectations of Acme, but it also comes in to cost $15,000. That certainly doesn’t leave Acme in a great position, and they refuse to pay the difference. To settle the difference and avoid any future costly legal disputes on either side, Acme and the consultant may sign a debt accord and satisfaction release that says that Acme will pay the consultant only the original $10,000 and consider the bill to be paid and closed.
This claims release also does exactly what it sounds like, release one or more individuals from past liability for an accident, including any costs and damages incurred by it. Like other release agreements described here, this one will contain provisions tailored specifically to civil claims, often damages, results from a motor accident.
A motor vehicle release can be one way or two way in nature, such that only one person involved in the accident or both people involved in the accident can release claims against the other. Whether it’s one way or two way will depend on the nature of the accident and the disposition of those involved. Like other release agreements, this is also intended to reduce the potentially significant costs of lawsuits in the future arising from the accident itself.
A mutual release agreement is, well, exactly what it sounds like: an agreement where each party releases the right to pursue legal action against the other at the same time and often on the same terms. A mutual release agreement can be a convenient and quick way for both parties to cleanly walk away from a situation without fear of future legal repercussions or complexities, at least as much as that is covered under the agreement. Consideration in a mutual release can be the same for both parties or unique to each side. In either case, it provides a clean way to avoid potentially costly legal actions down the road.
As an example, say you and a business partner are working together on a company, but decide to part ways. You can each pursue the matter in court, which can take a long time and be very expensive, or you can use a mutual release agreement that’s tailored to your specific situation. Keep in mind that once the agreement is signed, you not only release past and existing claims against one another, but also potential future claims as well. In any case, that’s usually the best way to resolve problems and disagreements before they become too expensive.
Mutual release agreements can be known by several names, including a Partnership Release Agreement, Mutual Release and Settlement Agreement, or Mutual Release and Termination Agreement, depending on exactly what is being terminated and what is being released.