A mutual release of liability (waiver) form is a legal document used to absolve all parties in an agreement from legal liability for any claims arising from a specific transaction or occurrence. It’s commonly used in situations where two parties are settling a dispute or severing a relationship and want to avoid future claims.
Why You Need a Mutual Release Agreement
A mutual release agreement can help the involved parties acknowledge responsibilities and achieve a solution to a legal problem or dispute without getting involved in a lengthy, expensive legal process.
It may be used in situations such as:
- Resolving a business dispute
- Settling a lawsuit
- Closing a business
- Terminating a partnership
- Resolving a debt
- Settling a property dispute
- Ending a legal contract
- Settling a motor vehicle accident
General Release vs. Mutual Release
Number of Parties
- General Release: One party releasing another
- Mutual Release: Multiple parties releasing each other
Reciprocity
- General Release: Only one party is released from liabilities, and the other party retains its rights
- Mutual Release: All parties involved release each other from specified claims, creating a more balanced and reciprocal arrangement.
Use Cases
- General Release: Used in scenarios where one party wants to release the other from liability without expecting reciprocal releases, such as employment termination, settlement agreements, or individual legal disputes.
- Mutual Release: Used in situations involving multiple parties seeking to resolve disputes or terminate relationships, such as business partnerships, contractual agreements with multiple stakeholders, or group settlements.
Both types of releases are legally binding and require valuable consideration to ensure they comply with relevant laws and fully protect the interests of all parties involved.
How to Write
Your mutual release of liability should include details regarding the parties involved and the matter being addressed. Begin with a fillable mutual release agreement that covers all your legal requirements. Then, enter the following details.
Step 1 – State
Enter the state where the agreement applies. For example, if you are settling a business dispute in Maine, complete the agreement for Maine, even if you complete the form in a different location.
Step 2 – Date
Add the full day, month, and year you complete the mutual release form. This is the date the agreement goes into effect.
Step 3 – Parties’ Names and Addresses
Enter the full names and addresses of participants in the mutual release. If either party represents a business, enter the business name and address as well as the representative’s name.
Step 4 – Claim Details
Explain the matter that the mutual release addresses. Include as much detail as possible.
Step 5 – Method of Resolution
Explain how the matter will be resolved. This is typically through financial payment or exchange of a disputed item. Indicate who will pay the consideration, who will receive it, and the amount of money or a specific item you will exchange.
Step 6 – Release of Fault and Responsibility
Indicate that signing the release is not an admission of fault or responsibility by either party. Both parties agree that neither party owes the other anything beyond the exchange specified in this release.
Step 7 – Statement of Release
Clearly outline the scope of the release of liability. Declare which risks, liabilities, damages, and other claims are released by this agreement. Include terms for alterations, amendments, transferability, and enforceability. This section indicates which state’s laws apply to the mutual release.
Step 8 – Names, Dates, and Signatures
All parties should print their names, sign, and date the agreement. Depending on the state where you sign the release, you may need a notary or witnesses. Check your state laws before signing.
Avoid signing the contract until you review your state’s notarization requirements. Failure to meet legal signature guidelines could invalidate your mutual liability release.
How to Execute
To fully execute a valid mutual release liability form, you may need signatures from multiple witnesses. You may also need a notary acknowledgment form. Every state’s requirements differ.
For example, New York does not require notarization for release of liability, per NY. Gen. Oblig. Law § 15-303. Mississippi, on the other hand, requires certain liability waivers to be notarized.
States also have different guidelines for storing and sharing a mutual liability waiver. To cover your bases, consider storing both electronic and secure copies in a physical location. Maintain your privacy by submitting documents through encrypted programs designed to ensure confidentiality.
Waiver Enforceability
Your waiver’s enforceability will often depend on clear and specific language. To protect yourself, consider the following:
- Clearly name and identify all parties.
- State the details of the waiver in plain language.
- Ensure all signatures and dates are valid.
- Follow all state witness and notary guidelines.
In the event of a misunderstanding or dispute, you may have to pursue legal action. Consult with an attorney familiar with contract laws in your state before you proceed to understand.
Sample
Download a mutual release of liability form in PDF or Word format.
Frequently Asked Questions
Can a Contract Be Terminated By a Mutual Release of Liability Agreement?
YES, a contract can be terminated by a mutual release of liability agreement by including the termination in the language of the release. Terminating a contract can end an agreement, but it does not necessarily release both parties from liability for matters related to the contract.
What Happens When a Mutual Release Is Not Signed
When a mutual release form is not signed, it is not considered a legally binding document. To be valid, the release must have signatures from all parties involved in the release. Additionally, state laws may require acknowledgment from witnesses or a notary public.
Do You Need a Mutual Release From a Purchase Agreement When No Earnest Money Was Given?
NO, you do not need a mutual release from a purchase agreement when no earnest money or deposit was given. Even without earnest money, you could benefit from signing a mutual release canceling the purchase agreement. Doing so absolves both the buyer and seller from any obligations, financial or otherwise, related to the failed purchase.
