An offer and an acceptance are essential requirements for a valid release. This is due to the fact that a release is in essence a contract[i] and an offer and an acceptance are essential elements of a contract. A release is an agreement among parties wherein a person discharges another from a claim or obligation. The result of a discharge of a claimant is that s/he is surrendering the right to prosecute a cause of action.
Usually, a release is made under writing upon the offer and acceptance by the parties. The party, who is discharged, need not sign the document. The absence of a signature of the discharged party will not make a release deed invalid, if the signature of the discharged is not relevant or intended in the release. A release takes effect on the delivery of the document
The terms of a release will be construed in a way to give effect to the intent of the parties.[ii] The terms of the offer and acceptance of a release must be clear and unambiguous in order to ascertain the nature and extent of the parties’ rights and obligations.
A release was enforceable where an insurance company acted on a consulting service’s promise to execute a release in their favor. Even though, there was only a promise to execute a release, the release may be enforced as there exists the elements of offer and acceptance by the parties[iii].
The determination of claims or causes of action that are covered by a release which arise out of personal injury accidents depends on the purpose for which the release was executed. If the terms contained in a release are limited to only specific claims, then there is no bar in pursuing other claims related to a different cause of action. A release will be construed to understand the intention of the parties through the offer and acceptance made between the parties on the specific claims only. A release will not be construed in a way the parties did not desire or intend[iv].
A prime contractor may sue the government for damage sustained by its subcontractor only if the contractor is not discharged of a claim and has suffered actual damages. A suit may be brought when the prime contractor is not discharged from a claim and has reimbursed its subcontractor or is liable to reimburse in future[v].
When the name of a third person is not mentioned in a release, the presumption would be that the release of that party was not intended by the parties to the release[vi].
An offer and acceptance of a release made between parties against public policy is not valid[vii]. A party may release another party from being liable for another’s negligent act. However, the matter or issue which is released by a party must not be anything against public policy.
A release may be made on satisfaction of a condition. A release which states that it shall take effect on the occurrence of a condition will become operative on the occurrence of the condition. But a conditional release does not have any legal effect when it is neither under seal nor supported by valuable consideration[viii].
A release should be made in a way that benefits all parties in almost equal proportion. There should not be any disparity in the bargaining power between parties.
[i] Torrence v. Stenson, 87 Misc. 2d 697 (N.Y. County Ct. 1976).
[ii] Hansen v. Ford Motor Co., 120 N.M. 203, 1995 N.M. LEXIS 264.
[iii] Ismert & Associates, Inc. v. New England Mut. Life Ins. Co., 801 F.2d 536, 1986 U.S. App. LEXIS 30934.
[iv] Torrence v. Stenson, 87 Misc. 2d 697 (N.Y. County Ct. 1976).
[v] Pan Arctic Corp. v. United States, 8 Cl. Ct. 546, 1985 U.S. Cl. Ct. LEXIS 942.
[vi] Luther v. Danner, 268 Kan. 343, 2000 Kan. LEXIS 15.
[vii] Springer v. Horn, 2009 U.S. Dist. LEXIS 29294 (N.D. Okla. 2009).
[viii] Clark v. Sperry, 125 W. Va. 718, 1943 W. Va. LEXIS 45.