What is a deed of release?
A deed of release is a legal document formed between two parties that brings a dispute or an agreement to an end, and can in fact can be used to prevent a dispute from arising in the future. Generally speaking, a ‘release’ is a discharge of obligations.
There are a number of commercial lawyers in Brisbane, and it is important to ensure you receive legal advice before entering into a deed of release. This will guarantee you know exactly what you are entering into and what you are electing not to do.
If you are currently settling a commercial dispute with another party or want to prevent the possibility of a dispute in the future, you will want to consider signing a deed of release.
When might I need to enter into a deed of release?
In the context of commercial disputes, a deed of release can be an important element of dispute resolution. A deed of release can bring a dispute between parties to an end and is often used combined with a settlement agreement.
Often in the case of commercial disputes negotiations are first entered into in an attempt to settle the dispute and avoid litigation. This can be in the best interests of all parties due to the high costs surrounding litigation.
For instance, in a commercial dispute maybe one party has breached a term of their legal contract, or they haven’t been performing their contractual obligations. In this situation,
one party may elect to pay a sum of money to put an end to the dispute and release them from their obligations under the legal contract – Once a settlement has been reached, the deed of release will ensure that the dispute is settled once and for all and prevent the other party from bringing any further claims about the dispute in the future.
If you are the party that is considered to be liable in the dispute, it will be extremely important for you to enter into a deed of release once you have reached a settlement with the other party, as this will effectively release you from present and future liability related to the claim.
Deeds of release are also particularly common in the context of employment. It is common for employers to require an employee to sign a deed of release upon exiting the business. The deed will ensure that the person is not able to make any employment claims against your business after they have ceased their employment. Usually, these deeds will prevent unfair dismissal claims or claims for any loss as a result of the termination.
Overall, the purpose of the deed of release is to provide certainty on how either an agreement or dispute will come to an end.
Another situation that may arise, is that both parties wish to mutually be released from liability under an agreement. Whereby both parties will be released from obligations and generally any future claims, demands, debts, or any other actions that could arise from their legal contract upon signing the document.
Are there any risks involved?
While this may seem straightforward, you need to understand exactly what rights you are omitting by signing the deed of release. You may want to ensure the other party are only being released from liability in relation to the claim or dispute, and not from all potential liability.
It is important for a deed of release to be reviewed by a lawyer, in order to prevent a party from being released from future claims which could be considered unwarranted.
It is also important if you do sign a deed of release that you are aware of exactly you are being asked to sign, and what you are agreeing not to do.
Negotiating the deed of release could make a big difference to your obligations in the future.
What happens if there is a breach of the deed?
If a party breaches their deed of release, the other party is entitled to begin legal proceedings to recover damages for any loss endured due to the breach of the deed. Make sure you seek legal advice from one of the many commercial lawyers in Brisbane if a party to your deed of release does not comply with the agreement.
Final note: A deed of release in a commercial context acts as a way to bring a dispute or an agreement to an end, and also acts to prevent disputes from occurring in the future. It is important that you seek legal advice before entering into such a deed as to ensure you are aware of exactly what you are agreeing to, and what rights you are omitting.
GLG Legal specialises in contract law if you are in need of legal advice, or professional contracts such as a deed of release contact our team to discuss your options. Contact GLG Legal.