Deed of Release

The Deed of Release is one of the most adaptable documents in any legal tool box.

It usually is a brief, but carefully targeted, document used to either bring a dispute to an end or to prevent one from ever arising.

Such a document could be used to evidence the settlement ‘deal’ between the parties. If you are presented with a Deed of Release, make sure you are getting a good deal and do not sign it without proper advice.

Typically under such a document, one party undertakes to pay a certain amount or to do a specific act and the other party agrees that it will be prevented from making any further claims related to that matter.

A common use is where an employee is being paid a redundancy amount. In those circumstances, the employer and employee execute a Deed or Release and it is agreed that the payment of the redundancy amount will bar any further employment-related claims.

Another common use is where ligation is under way between the parties. You’ve probably frequently heard news reports which state that something was “settled out of court” and the “terms of the settlement are confidential”. A Deed of Release would be the document behind that aspect of the news story.

The common provisions in a Deed of Release are:

  • without any admission of liability the parties agree to settle the matter;
  • a description of what Party A must do;
  • a description of what Party B must do;
  • the terms and scope of the unconditional release;
  • a bar to any further legal proceedings;
  • confidentiality undertakings;
  • a warranty that:
  • each party has the capacity to enter into the Deed;
  • entered into the Deed without any duress;
  • had the opportunity to seek independent legal advice;
  • understood the consequences of entering in the Deed;
  • knows the other party is relying on the undertaking being given; and
  • neither party gave any other promises, representations or inducements.

Of course, a Deed of Release usually includes some boilerplate clauses and some interpretation boilerplate.

It is also standard practice to execute the document as a deed rather than an agreement as this overcomes any concerns about the possible absence of consideration.

Photo by Brenda Clarke

About Mark Toohey

Mark Toohey is an experienced commercial lawyer who has worked with both major law firms and as General Counsel in the media, telecommunications, software and IT industries. He has been a lawyer, company director, marketing director, company secretary and entrepreneur. Mark's commercial experience extends way beyond the theoretical. He has helped launch a number of start-up businesses and his hands on experience was gained from negotiating and documenting deals for a wide variety of business initiatives. To learn more about Mark, go to http://www.adroitlawyers.com.au.

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