What is a Release clause?

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When signing a settlement agreement, the most important consideration is whether the agreement prevents one or both parties from filing any lawsuits in the future.  If the agreement does not prevent future litigation over the same topic, it is essentially useless as a settlement.

This release of future claims is contained in the release clause of most settlement agreements.  The release clause should clearly state that the case being settled will be withdrawn from court and that one or both parties, depending on the circumstances, forever gives up their right to file litigation based on the same dispute in the future.

As this clause forms the heart of the settlement agreement, it is very important to have the wording reviewed by an attorney before signing.  Signing a settlement agreement with an ineffective release clause could result in simply paying money for nothing.

Please contact our office if you would like further information regarding Release clauses.