Whether you’re operating as an individual or a business, entering a legal dispute can be an uphill battle. Even with an experienced legal team on your side—like the Law Offices of Kirk Halpin & Associates, P.A.—sometimes settling is a better option. It’s not always a matter of one siding “giving in” and the other one “winning.” In fact, it can be a joint decision confirmed by a mutual release agreement. Though this isn’t an option you hear a lot about, it could be the perfect solution to your legal issues.
What exactly is a mutual release agreement?
Essentially, it’s an alternative (or end) to litigation. With a mutual release agreement in place, each party involved consents to give up its claim. Depending on how it’s worded it can apply to all future disputes that may be related or be limited to the initial claim. We can always talk about limiting the scope within the contract, if it comes to that. But both parties must understand what they’re agreeing to before they sign anything. It could involve you, or someone you know, being unable to pursue legal action against the same person or entity, regardless of what unfolds. That could be ideal when you’re trying to prevent similar recourse in reverse, but we want to help you make this decision with all of the available information upfront.
When would you use this type of agreement?
Honestly, it has a wide range of applications in virtually every area of the law. We’d obviously need to know your legal situation before making any official recommendations, but it’s commonly applied to business law. When starting a new company, especially with partners, you usually draw up contracts to outline how the assets will be managed and divided. Should one of the original partners wish to leave, or the business fail, one or more parties may need to dissolve said contract(s). A mutual release agreement or settlement agreement may be perfect for this!
It allows the company to sever ties with the individual, while continuing operations without the expense of a lengthy legal battle. Once a mutual release agreement or settlement agreement is in place, the terms of the original business contract no longer apply. This could be part of a larger resolution, or the only document needed for settlement—it all depends. Outside of corporate law, it also has a place in personal injury disputes, debt disagreements, and other types of contracts. If you’d like to pursue this alternate solution, please give us a call!
Is this the same as a rescission?
Although these two terms often go hand-in-hand, they refer to different aspects of contract law resolution. With a rescission, you’re basically undoing the original agreement. It could be because both parties were unable to fulfill their obligations and want to be released from liability as a result. Or from another issue entirely. Either way, it returns all parties involved to their “pre-agreement” statuses. Thus, the rescission ends their commitments and the mutual release agreement or settlement agreement prevents either side from bringing suit after the fact. It’s a very thorough way to tie up any loose ends resulting from a previous arrangement.
This is just one of the ways we help our clients with legal disputes—both current and potential. We also act as consultants to prevent issues from arising during the initial contract establishment, real estate deals, franchise agreements, and more. Contact our offices today to see how we can become a part of your team.