Tuesday, July 04, 2006

SOME LESSONS ON RELEASES

Releases are a regular feature of business and contractual life. For a myriad of reasons, such as part of settlement of a controversy, or to avoid liability before a transaction or activity is undertaken, one person will "release" another from past, present, or future liability for the stated items. A recent Florida case provides a few lessons on releases:

1. IF YOU WANT TO BE RELEASED FROM LIABILITY FOR YOU OWN NEGLIGENCE, IT IS A GOOD IDEA TO EXPRESSLY MENTION THE WORD "NEGLIGENCE" IN THE RELEASE. The appellate court noted that some District Courts of Appeal require that "negligence" be specifically included in the release language before a negligence release will be effective, while others do not. Indeed, in the instant case, the word "negligence" was not included - the defendant was released of "any and all liability, claims, demands, actions, and causes of action whatsoever" - and the appellate court concluded that negligence was still released, but in another DCA a different result could obtain. Therefore, to avoid any challenges, the term "negligence" should be included in a release if the release is intended to cover negligence.

2. IF YOU INTEND THAT THE RELEASE APPLY TO THE FUTURE, BE SPECIFIC ABOUT THAT. In the instant case, a motorcycle rider released a track from all liability and claims in 1999. The track intended that the release apply to the current use of the track, and all future use of the track. When the rider sued the track for negligence for an injury occurring in 2002, he argued that it was not covered by the 1999 release. The appellate court found that the release was not clear as to its application to future events, and thus found it did not protect the track owner from liability in 2002. Therefore, if you intend for a release to apply in the future, make sure it is explicit. The court did note that it saw nothing wrong with a properly worded release applying to future events - that is, a release does not have to be signed contemporaneously with the event at issue to be effective.

3. DON'T EXPECT TO RELY ON COURSE OF CONDUCT OR OTHER CIRCUMSTANCES TO HELP INTERPRET A RELEASE CLAUSE IN FAVOR OF THE RELEASED PARTIES. This is what the track tried to do to avoid liability for the 2002 accident. The appellate court indicated that course of conduct and other circumstances could not be considered in interpreting the meaning of the release since that violated the rule of law which places the burden on a party seeking to absolve itself of liability to do so in clear and unequivocal terms.

Case: Cain v. Banka, II, 5th District. Case No. 5D05-3986. Opinion filed June 30, 2006
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