What Is a Release Clause in a Settlement Agreement?
When you have been injured in an accident, it is essential that every step of your case from beginning to end is handled correctly, including the actual settlement agreement. The experienced Riverside personal injury lawyers at Heiting & Irwin can help at every step of the way.
A release clause is one of the key facets of a settlement agreement. In essence, you need to give something to get something. Here, you are getting money from the insurance company in exchange for extinguishing your right to future claims arising out of your injuries. The release clause is final, and you need to be very careful when signing it.
Take control of your legal destiny by reaching out to an experienced California personal injury lawyer at Heiting & Irwin. We will take the time to listen and learn before we fight for you to receive full compensation for your injuries.
How Does a Release Clause Operate in a Settlement?
A settlement agreement is a type of binding contract between you and the defendant in your case (typically the insurance company). Like any contract, you would need to have consideration for it to be legally valid. Consideration means that each party is doing something for the other. In the context of a personal injury settlement, the insurance company is paying you money in exchange for you releasing them from any further liability in connection with your injuries. Accordingly, just about every settlement agreement contains a release clause to this end. You won’t be paid unless you sign the agreement, and the document will almost certainly contain a release clause every single time.
The insurance company wants finality when they have paid you money. They do not want the claim to be open on their books for the indefinite future. There is a reason why they want to make a one-time lump sum settlement payment because they want to extinguish a claim entirely.
It Is Very Difficult to Get Out of a Release Clause
Unless the agreement says otherwise, the release clause closes off your ability to seek any further compensation for your injuries. Ultimately, you would need to find some reason why the release clause is invalid in the first place to have any chance at getting more money. Some exceptions to the finality of a release clause include the following:
- One party induced the other to sign the release clause through the use of fraud or misrepresentation
- You are under duress, or you are coerced to sign the settlement agreement
- Both parties were mistaken about a basic fact that underlied the settlement agreement
- The agreement was so one-sided as to be unconscionable
- You had an unknown claim at the time that you signed the release clause (but many agreements contain a waiver of unknown claims)
The onus would be on you to show why the settlement agreement was not valid in the first place. Know that you are facing an uphill battle if you choose to attempt to reopen the settlement agreement after you have already been paid and received the money.
Since release clauses are difficult to challenge, it is essential that you negotiate to receive the highest possible amount of compensation for your personal injury. In an overwhelming majority of cases, you cannot go back to ask for more money if you did not receive enough in your settlement. Further, you also should never sign a release clause until you know the full scope and extent of your injuries. You may be pressured by the insurance company to agree to a quick settlement. You should never do this because you are barred from receiving more money if your injuries turn out to be worse. The insurance company would immediately seek to dismiss your case and refuse to negotiate with you. Accordingly, you typically only get one chance to settle a personal injury case, and you need to give it your best effort. It is best to do this with the help of an experienced personal injury attorney such as Heiting & Irwin.
In addition, you may want a personal injury lawyer to review the exact language of the release clause before you sign the agreement.
Contact a Riverside Personal Injury Law Firm Today
When you need legal help after you have been hurt in an accident, speak to the experienced Riverside personal injury attorneys at Heiting & Irwin. We can handle all aspects of your case, whether it is helping you qualify for compensation or assisting in executing the specifics of a settlement agreement. You can schedule a free initial consultation by filling out an online contact form or by calling us today at (951) 682-6400.
