Parties during dispute resolution process expect no further claim will arise. A Deed of Release is a commonly used legal document to achieve that outcome. Deed of release can be mutual as well as one way. Choosing between the two is an important decision that can significantly affect your legal rights.
Let’s learn about the difference between the two and help you determine which option may be right for you.
What Is a Deed of Release?
A deed of release is a legally binding agreement in which one or more parties agrees to reach the final settlement and releases another party from legal claims or liabilities. Once properly drafted, a deed of release generally prevents further legal action in relation to the matters covered by the deed.
Deeds of release are commonly used in employment matters, commercial disputes, contract terminations, debt settlements and business separations.
About One-Way (Unilateral) Deed of Release?
A one-way deed of release involves only one party giving a release. One party agrees not to bring any claims against the other while the other party does not provide a release in return.
This type of deed is typically used where the legal risk or potential claim sits primarily with one party.
Use of deed of release
– An employee releasing an employer from claims in exchange for a termination or settlement payment.
– A claimant releasing a business after receiving compensation
– A lender releasing a borrower after repayment of a debt
Advantages of a one-way deed of release
– Simpler and more straightforward
– Appropriate where liability is clearly one-sided
– Often faster to negotiate and finalise
Disadvantages
– The releasing party permanently gives up rights without reciprocal protection
– It may be unsuitable if both parties have potential claims
What Is a Mutual Deed of Release?
A mutual deed of release involves both parties releasing each other from claims arising out of dispute. Each party agrees that they will not pursue the other for claims that exist up to a specified date or event.
Where a mutual deed of release is used –
– Settlement of commercial or contractual disputes
– Termination of business partnerships or joint ventures
– Resolution of disputes where both parties allege breaches
Advantages of a mutual deed of release –
– Provides certainty for both the parties
– Creates a balanced and commercially fair outcome
– Reduces the risk of future disputes or litigation
Disadvantages
– Mutual deed of release may be broad and unintentionally capture valuable claims
– Careful drafting is required to avoid unintended consequences
Difference Between Mutual and One-Way Deeds of Release
The primary difference lies in who gives the release. In a one-way deed, only one party gives up their rights whereas in a mutual deed both the parties do so. A one-way deed is usually appropriate where only one party has a realistic claim while a mutual deed is better suited to situations where both parties want finality and protection.
Mutual deeds tend to require more careful negotiation while one-way deeds are generally simple to execute.
Which Is Right for You?
Choosing the right deed depends on the circumstances including:
– Whether one or both parties may have legal claims.
– The level of risk and potential liability involved.
– Whether payment or other consideration is being exchanged.
Why Legal Advice Matters
A poorly drafted deed of release document may fail to protect you from future disputes. So it is advisable to take a legal help from deed of release lawyers Perth to prevent futher conflicts.
