Requirements for a Valid Release
A release is the relinquishment of a right, claim, or privilege by a person in whom the right, claim, or privilege exists to the person against whom it might have been demanded or enforced[i]. A release is contractual in nature and is governed by the law of contracts[ii]. A valid release must exhibit all the ingredients of a valid contract. The essential elements to a valid release are:
- parties capable of contracting;
- party’s consent;
- lawful object;
- offer and acceptance; and
- sufficient cause or consideration.
In construing a contract, courts must give effect to the intent of the parties. The intention of the parties is found in the contract’s language[iii]. Vagueness or indefiniteness clouds the formation of a contract. The capacity to execute a release must be knowing and voluntary. Mere perception that someone is disabled is not enough to invalidate a release. Not all disabilities and not all psychiatric disabilities inherently involve a question about capacity to act knowingly and voluntarily[iv].
A release like any other contract must result from an offer. An offer permits the fixing of the terms of the parties’ respective obligations[v].
Before a plaintiff is compelled to surrender his/her claim for relief against a wrongdoer, it must be shown that s/he has intentionally surrendered his claim. Additionally it must be shown that s/he received full compensation for his/her claim[vi].
Consent to a contract is not real and is voidable when obtained through duress. Threats of prosecution for a crime fall within the embrace of the statutory definition of duress[vii]. In a particular case[viii], the suit was to cancel the promissory notes executed by a plaintiff under duress through threats of criminal prosecution for his alleged alienation of defendant’s wife’s affections. The defendant had criminal conversation with his wife. The issue settled by the court was not whether plaintiff was guilty or innocent of the alleged act. The court settled the issue based on the degree of pressure employed to prevail upon him to execute the notes as to overcome his free will. Threats, actual or implied, of a prosecution of one in fact guilty of a crime constitutes such coercion as will avoid a contract[ix].
A mistake also invalidates a release. When a plaintiff alleges that at the time she signed the paper containing the release, she thought she was signing a roster, the court must verify whether there was a consent for a valid release[x].
However, no particular form is required in drafting a release. The language used must be clear. The deed must not be ambiguous[xi]. As the law governed is one of contract, a release can be oral[xii].
Moreover, a release can be voided due to fraud or fraudulent representations made by the releasee or his agent. The releasor must rely upon fraud and it must be the cause of his/her injury[xiii].
A release takes effect on delivery, subject to the occurrence of any condition, and discharges the duty[xiv]. As such, the delivery is an essential requirement in forming a valid release.
In order for it to take effect, a release must be supported by adequate consideration. Provided something of value is received, the consideration will be deemed adequate. Additionally, a release is ratified by acceptance of consideration. A release is not effective unless the party giving the release receives something of value. The party receiving consideration is not otherwise entitled to the consideration[xv].
A release is valid and enforceable only when it is not contrary to public policy[xvi]. A release is contrary to public policy:
- when it is given in advance of any liability;
- when a statute prohibits a party from contracting away his liability; and
- when a release pertains to criminal prosecution.
[i] Balderrama v. Milbank Mut. Ins. Co., 324 N.W.2d 355, 356 (Minn. 1982).
[ii] Erck v. Bachand, 69 S.D. 330, 335 (S.D. 1943).
[iii] American State Bank v. Adkins, 458 N.W.2d 807, 809 (S.D. 1990).
[iv] United States v. Schneider, 111 F.3d 197 (1st Cir. R.I. 1997).
[v] Continental Casualty Co. v. Knowlton, 232 N.W.2d 789, 794 (Minn. 1975).
[vi] Couillard v. Charles T. Miller Hospital, Inc., 92 N.W.2d 96, 102 (Minn. 1958).
[vii] Cochrane v. Nelson, 45 S.D. 609 (S.D. 1922).
[viii] Cochrane v. Nelson, 45 S.D. 609 (S.D. 1922).
[ix] Cochrane v. Nelson, 45 S.D. 609 (S.D. 1922).
[x] Johnson v. Rapid City Softball Ass’n, 514 N.W.2d 693, 697 (S.D. 1994).
[xi] Lupton v. Torbey, 548 F.2d 316, 320 (10th Cir. Kan. 1977).
[xii] Sears, Sucsy & Co. v. Insurance Co. of North America, 392 F. Supp. 398, 405 (N.D. Ill. 1974).
[xiii] Brackeen v. Milner, 88 Ill. App. 2d 50, 58 (Ill. App. Ct. 1st Dist. 1967).
[xiv] Restat 2d of Contracts, § 284.
[xv] Weiner v. McGraw-Hill, 443 N.E.2d 441, 444 (N.Y. 1982).
[xvi] Trumbower v. Sports Car Club, Inc., 428 F. Supp. 1113, 1117 (W.D. Okla. 1976).