Here at LegalVision, we see these kinds of clauses written into contracts of all shapes and sizes. We understand the inherent risks that threaten the unwitting non-lawyer.

These clauses are essential to the quick resolution of disputes without resorting to the Courts for intervention, as they map out the exact terms of the agreement with regards to future rights of the parties.

What is the difference between ‘release’ and ‘indemnity’?

A release relinquishes previous duties, whereas an indemnity is a promise to take on the risk of loss or damage that the other party may suffer in consequence to an event or transaction. Indemnities feature in most commercial contracts, as well as in a Deed of Release.

In a nutshell, a Deed of Release are typically concise, private documents that are utilized to prevent, or put an end to, disputes.

When a dispute winds up in Court, negotiations take place to avoid the huge expense of litigation. If, and when, partiers agree to settle, the party paying the other party will typically request both parties enter a Deed of Release, releasing each other of present/future liabilities relating the particular dispute.

When is a Deed of Release used?

Let’s say you get into a car crash with another driver and the driver doesn’t have any insurance. The driver who crashed into your car may offer to pay you cash on the spot for the repairs of your car, provided you sign a Deed of Release that would prevent you from taking any further action against the driver and his family. The Deed of Release might extend to any and all future claims in any car accident, which would place you at significant risk in the event that you have another car accident with the driver or his family (despite how unlikely this scenario is).

If you find yourself in this situation and do not have a lawyer present who can advise you, you should only agree to release the driver himself and only with respect to this particular car crash. On top of this, it might be in your best interest to only sign a release that pertains to the physical damage to the car and not to the emotional damage you may have suffered in the crash.

Employment matters: Should you sign a Deed of Release?

When an employee becomes redundant from his or her position, the employer will, more often than not, require the employee’s signature on a Deed of Release that relinquishes the employee’s right to sue the employer at any stage in the future for any reason related to the employment. It is important that, before you sign, you first consider whether your employer owes you and whether the redundancy is sufficient.

Some of the provisions that feature more frequently in a Deed of Release or a Waiver Deed include:

  • The payment procedure and terms;
  • The type of ‘release’, whether unilateral or mutual;
  • That further litigation will not be an option, and that the Deed can be relied upon in the event that further legal action is taken;
  • The elected jurisdiction over which the Deed will be effective; and
  • A confidentiality clause.
  • A warranty that independent legal advice has been sought by each party that acknowledges each party’s understanding of the terms and conditions of the Deed;

Conclusion

If you have been approached by someone (employer, stranger, partner, etc) to sign a Waiver Deed, a Deed of Release or some sort of indemnity, and do not understand the terms of what you are signing, contact LegalVision’s team of lawyers on 1300 544 755.

Lachlan McKnight

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