Release

In one minute

A release is a formal giving up of a claim by the injured person, usually in return for payment. Once given validly, it ends the claim. A release given to one joint wrongdoer can free the others too.

A release differs from a promise not to sue, which only stops a suit against one person. Exams ask for the meaning, the effect on joint tortfeasors, and how a release can be set aside.

Legal provision

• Sections 62 and 63, Indian Contract Act, 1872: parties may rescind or alter a contract, and a promisee may dispense with or remit performance in whole or part, or accept a different satisfaction. Courts use these ideas by analogy for claims in tort.
• Sections 15, 16 and 19, Indian Contract Act: a release obtained by coercion, undue influence or fraud is voidable at the option of the person whose consent was so caused.
• Order XXIII, rule 3, Code of Civil Procedure, 1908: a lawful compromise of a suit is recorded and a decree passed in its terms.
• Order XXXII, rule 7, CPC: a next friend or guardian cannot compromise a suit for a minor or a person of unsound mind without the leave of the court.

Meaning and definition

A release is the voluntary and complete discharge of a cause of action by the person who holds it, in favour of the wrongdoer. It is usually made for payment of a sum. It is normally in writing, and often in a deed or in a signed settlement.

After a valid release, the claimant cannot sue on the wrong that was released. The release can cover one wrong or all claims arising from an event.

Detailed explanation

Step 1: what makes a release valid

• Free consent. The claimant must give it voluntarily. A release obtained by threat, undue influence, fraud or misrepresentation can be set aside.
• Knowledge. The claimant should know what he is giving up. A release of unknown or future claims is read narrowly.
• Capacity. A minor or a person of unsound mind cannot give a binding release. A compromise for them needs the court's leave.
• Consideration or a deed. A release is usually given for a payment. A formal deed does not need consideration in English law. In India, courts look to the Contract Act.

Step 2: release in joint wrongs

Joint tortfeasors are liable on one cause of action. A genuine release of one therefore discharges all the others, since the single claim has been given up. In Jameson v. Central Electricity Generating Board (2000), the House of Lords held that a settlement in full satisfaction of a claim against one concurrent tortfeasor ended the claim against another who was liable for the same damage.

The important question is the intention of the parties. If the settlement is only partial, or reserves rights against others, it does not end the claim against them.

Step 3: covenant not to sue

A covenant not to sue is a promise not to bring a claim against one person. It does not give up the cause of action. The claimant may still sue other wrongdoers, and the wrongdoer who was promised protection can claim damages if sued anyway. The words and the intention decide which has been given.

Step 4: releases for minors and persons under a disability

In motor accident claims, insurers often get a signed release. If the claimant is a minor, the release is not binding unless the court approved it. This follows from Order XXXII, rule 7 of the CPC.

Step 5: setting a release aside

• The claimant must prove coercion, undue influence, fraud, misrepresentation or mistake.
• He should act promptly. Delay may be treated as affirmation.
• If a court sets aside the release, the claim revives, and money paid may have to be given back.

Don't confuse: release, covenant not to sue and waiver

Point	Release	Covenant not to sue	Waiver
What it does	Gives up the cause of action	Promises not to sue one person	Gives up a known right, often informally
Form	Usually written, often for payment	A promise, usually written	Words or conduct
Effect on other wrongdoers	Frees joint tortfeasors	Does not free others	Only the right waived

Common mistakes

• Treating every settlement as a release of all wrongdoers. A partial settlement or a covenant not to sue does not do that.
• Forgetting that a release obtained by fraud or pressure can be set aside.
• Saying a minor's release binds him. It does not without court leave.
• Mixing release with accord and satisfaction. Accord needs performance.

Apply it

Leading case laws

• Jameson v. Central Electricity Generating Board (2000), House of Lords

  Facts. Mr Jameson, who had an asbestos-related disease, settled his claim against one employer for £80,000 as a "full and final" settlement of all causes of action. After his death, his widow sued another concurrent wrongdoer.

  Principle. The House of Lords held that satisfaction of the claim against one concurrent wrongdoer ended the claim against the other, since the loss had been met. In Heaton v. AXA Equity and Law (2002), the House of Lords later limited this: the claimant is barred only where the settlement covered his whole loss.

  Why it matters. It shows the effect of a full settlement on other wrongdoers.

How to write this answer in the exam

Key points to remember

• A release is a formal discharge of a claim, usually for payment.
• It needs free consent, knowledge and capacity.
• A genuine release of one joint tortfeasor discharges all.
• A covenant not to sue does not free the others.
• A release for a minor needs the court's leave (Order XXXII, rule 7).
• A release obtained by fraud or coercion is voidable.

Quick self-test

Related topics

• Joint Liability – Liability of Joint Tortfeasors
• Extinction of liability
• Waiver and Acquiescence
• Accord and Satisfaction