General Releases: Waiving All Claims at Once
What Is a General Release?
A general release is a broad waiver in which one party releases the other from all claims, demands, and causes of action — known and unknown — arising out of their relationship or a specific matter. Unlike a limited release that covers only particular claims, a general release sweeps as broadly as possible.
General releases are intended to provide a clean break, ensuring that no future claims can arise from the released matters.
General Release vs. Limited Release
General release — Covers all claims of every kind, including those not yet discovered. Typically includes language like "any and all claims, known or unknown, arising from..."
Limited release — Covers only specified claims, leaving other rights intact. For example, releasing only claims related to a specific contract dispute while preserving unrelated claims.
When General Releases Are Used
- Employment terminations — Employees release all employment-related claims in exchange for severance
- Business dissolutions — Partners release all claims against each other when dissolving a partnership
- Major settlements — Parties resolve all disputes at once rather than leaving loose ends
- Asset sales — Sellers release all claims related to the sold business
Dangers of Signing a General Release
- Unknown claims — You may be releasing claims you have not yet discovered, which could be significant
- Broad scope — The release may cover more than you intended, including unrelated matters
- Inadequate consideration — Ensure the payment or benefit you receive justifies the breadth of what you are releasing
- California Section 1542 — California law presumes people do not intend to release unknown claims, so a valid general release in California must specifically reference and waive Section 1542
Key Protective Measures
- Negotiate for specific carve-outs (ongoing obligations like pension, benefits, or vested equity)
- Ensure the release is mutual if both parties have potential claims
- Confirm the consideration is adequate for the scope of the release
- Insist on clear definitions of the claims, time periods, and parties being released
When to Consult a Lawyer
A general release is one of the most consequential documents you can sign. Consider consulting an attorney to fully understand the scope of claims being released and whether the consideration offered is fair.
This article is for informational purposes only and does not constitute legal advice. Consult a licensed attorney for guidance specific to your situation.