“Release” Yourself from Liability | William Bronchick
William Bronchick: People settle claims
out of court all the time, and that is often the smart thing to do. But, most
people forget the one simple step that is crucial to the process. This simple
step, if omitted, can result in a future lawsuit against you, even if you allegedly
settled the claim.
Consider the act of settling with a tenant
who his behind on his rent: you accept the keys, waive his back rent and he
moves out quietly. But, the tenant can always come back and sue you years later
regarding damage to his property because of a leaky pipe. There is a simple way
to avoid this lawsuit from happening.
Consider the times you may have
accepted or given an earnest money deposit on a real estate contract. The
closing never happened, and you either kept or forfeited the earnest money.
Does this mean you can’t be sued in the future for breach of the contract?
Don’t bet on it!
Consider the times you may have
settled a claim with your neighbor regarding any controversy that may have
allowed him to sue you. It may have been a situation where he fell on your
property and was injured. You offered to pay his medical bills and he
graciously accepted. However, two years later, what is to stop him from suing you
for additional damages for pain and suffering? The answer: nothing! OK, so now
you are begging me to reveal the secret of how to avoid future liability on
transactions such as these. The answer is simple: you need to get a written
release of liability.
A release, also known as a “general
release,” is a simple document by which someone agrees to release you from all
liability. A properly drafted release will prevent the signor of the document
(the “releaser”) from bringing any claims against you in the future that he had
as of the date of the release. Keep in mind that the release will not prevent
the releaser from suing you for new claims related to events that arose after
he signed the release by William Bronchick.
So, whenever you have a dispute
with any other party that is settled, make sure you have that party sign a
general release form before you give any money or consideration. And, speaking
of consideration, there must be consideration given for the release to make it
legally binding. In other words, you can’t just get someone to sign a release
with nothing in return. A promise to waive your own legal rights against the releaser
is sufficient consideration (i.e., you may have to sign a release against the
other party as well). If you can’t think of any consideration, consider any
counterclaim you may have against the opposing party, and threaten legal action
to create a “dispute.”
For example, if someone threatens to sue
you over monies owed for services, consider questioning any part of the
services provided that may have been performed inadequately. Of course, you may
have to visit with a lawyer to determine what claims, if any, you may have
against the party threatening you. In other words, don’t lie or make something
up. Do what lawyers do: use your imagination, find a creative argument that
might hold water, then bluff! Even if you have a very small chance of winning
on your counterclaim in court, it is sufficient consideration to waive that
claim in exchange for the opposing party waiving their own claim.
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