Release clauses in disputes settlement

Broad and all-encompassing release clauses generally found in agreements in settlement of a dispute may be limited in its application depending on the circumstances and knowledge of the parties at the time the release came into existence.

Key Takeaways

• When deeds of settlement and release are entered into, they often contain clauses which broadly release the parties from any future known and unknown claims against each other.
• While release clauses are often drafted as widely as possible, their broad terms may be constrained by the subjective knowledge and intention of the releasing party. This is so when they are unaware of the obligation being released, or if they did not intend to release it, such as unforeseen circumstances.