Release
A contractual agreement in which one party gives up a legal claim or right against another, typically in exchange for payment or other consideration.
While straightforward in theory, many businesses fail to actively track obligations tied to this concept - often resulting in missed deadlines, unintended renewals, penalties, or loss of contractual rights.
US Law · For business owners and foundersWhat is a Release?
A release is a legal instrument by which one party (the releasor) relinquishes a claim, right, or cause of action against another party (the releasee). A release is essentially a promise not to sue, backed by consideration. Once given, a valid release extinguishes the released claims - the releasor cannot later revive them.
Releases are the cornerstone of settlement agreements. When parties resolve a dispute, the defendant typically pays money and the plaintiff signs a release discharging all claims related to the dispute. Mutual releases (where both parties release each other) are common in business separations, employment terminations, and M&A transactions.
A release can be limited to known, specific claims, or it can extend to unknown or future claims. California Civil Code § 1542 limits releases of unknown claims unless the releasor expressly waives it. Many settlement agreements include an express § 1542 waiver to ensure the release covers all potential future claims arising from the same facts.
In practice, many teams rely on a contract expiry tracking system to stay on top of dates and obligations tied to clauses like this.
Key Elements
Consideration
A release must be supported by consideration - payment, a promise not to sue, or other value exchanged. A gratuitous release may not be enforceable.Scope of Released Claims
The release must clearly identify the claims being released - specific named claims, or a broad "any and all claims" formulation.Releasees Identified
The release should name all parties being released - including affiliates, officers, and employees if full protection is intended.Knowing and Voluntary
For employment releases (especially ADEA claims), the release must be knowing and voluntary, with adequate time to review. OWBPA requires 21 days to consider and 7 days to revoke.Real-World Example
Two companies settle a contract dispute. Company A pays $100,000. In return, Company B signs a mutual release discharging all claims each has against the other arising from or related to their contract.
Both parties give up the right to sue each other over the contract dispute. Company A's payment is the consideration for Company B's release; Company B's release of its own claims against Company A is part of the mutual exchange. The release should be broad enough to cover claims that either party may not yet be aware of - a "known and unknown claims" formulation achieves this.
This is why many businesses adopt automated deadline tracking to ensure no critical dates are missed before they pass.
Sample Clause Language
Mutual General ReleaseWatch Out For
Employees need adequate time to review releases
Under the OWBPA (for age discrimination claims), employees must be given 21 days to consider and 7 days to revoke a release. A release that does not comply is unenforceable for ADEA claims.Releases of unknown claims require explicit waiver
Without expressly waiving statutory protections (like California § 1542), a release may not cover claims the releasor was unaware of at the time of signing. Include the waiver if you need full closure.Don't let release deadlines catch you off guard
Key dates tied to releases - renewal windows, expiry cutoffs, notice periods - can easily slip through the cracks when tracked manually. Missing them triggers automatic extensions, penalties, or lost rights. ExpiryEdge tracks every critical deadline and sends automated reminders before they're due - so nothing slips.
Instead of relying on spreadsheets or manual follow-ups, a centralized renewal reminder system ensures every deadline is visible, tracked, and actioned automatically.
How to Use This in Your Favor
Always get a release in settlement agreements
Any payment to resolve a dispute should be paired with a signed release. A settlement payment without a release leaves the door open for the other party to sue again on the same facts.Name all potential releasees expressly
If you want affiliated companies, subsidiaries, officers, and directors covered, name them. Courts sometimes interpret releases narrowly - only the named parties benefit.Related Terms
Frequently Asked Questions
Can a release be undone?
A release can be voided if obtained through fraud, duress, or mutual mistake, or if it lacked consideration. Otherwise, a properly executed release is very difficult to undo - that is the point of getting one.
Is a release the same as a waiver?
They overlap. A waiver is a voluntary relinquishment of a known right - it can be unilateral. A release is specifically the relinquishment of a claim or cause of action, and typically requires consideration. In practice, the terms are often used interchangeably in settlement documents.