What is a Deed of Release
What is a deed of release?
A deed of release is a legal document that settles a dispute. It releases each party from any further obligations regarding the dispute and sets out the details of how the dispute is to be settled.
Deeds of release can be used in many different scenarios, such as after car accidents or to resolve business disputes. Once a deed of release is signed, going to court is not necessary.
A deed of release is therefore a useful way to avoid litigation.
However, parties to an on-going court case can still draw up and sign a deed of release, even while the matter is in court, if the parties now wish to settle the dispute and avoid any future legal action.
In its basic format, a deed of release contains:
- The date and the parties’ names
- The section ‘Recitals’
- The section ‘Operative Part’
- The section ‘Execution.’
The ‘Recitals’ section includes the background information and explains the dispute between the parties.
The ‘Operative Part’ is where the agreement and effect of that agreement is outlined.
The ‘Operative Part’ can be written in sections titled ‘Settlement of claim,’ ‘Definitions,’ ‘Confidentiality,’ ‘Taxes’ and ‘Proper law and jurisdiction.’
The ‘Settlement of claim’ sets out the terms of settlement, such as who will pay what.
‘Proper law and jurisdiction’ describes the state or territory law that applies to the deed of release.
The ‘Operative Part’ can also include information about what will happen if one party does not meet their obligations in accordance with the deed.
Finally, the ‘Execution’ is where both parties sign the deed of release.
Signatures usually need to be witnessed. It is recommended that each person keeps a copy of the signed deed for their own personal records.