Area of Law: Business & Corporate Law
Answer # 0311
ReleaseRegion: Ontario Answer # 0311
What is a Legal Release ?
A release, sometimes called a legal release, or a full and final release, is a legal promise that terminates any legal liability between the person signing the release (the ‘releasor’) and the person benefitting from the release (the ‘releasee’). A release is usually a written document although it may be made orally in some circumstances.
The releasee is the person who is being released from an obligation (in most cases a borrower who paid off a debt).
The releasor is the person who is releasing someone from an obligation (usually a lender).
When is a Release used?
Typically, a release is used when loans are fully paid, or when an obligation of one party to another is fulfilled. For example, if someone finishes paying a loan that was used to by a vehicle, the lender may be asked to provide a release. This legal release can then be used to remove the lien that the lender had put against the title of the vehicle. This becomes important should the vehicle owner wish to sell the vehicle.
A release can also be used by a corporation to protect itself from being sued by a former employee. In such cases, once the employee has been given sufficient financial compensation, he or she will sign a release of all rights that may have existed as part of his or her employment.
What information is included in a Release ?
Although a release can include a variety of information, depending on the circumstances, the common elements are:
- identify the parties,
- stipulate the consideration being given,
- identify the obligations being released, and
- include a promise of the releasor not to take action against the releasee with respect to those obligations.
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