Whenever settling a conflict that may arise either due to employment or due to commercial transactions or partnership dissolution or claims of personal injury or other concerns relating to family businesses, you may be requested to sign a Deed of Release. Although these documents may be introduced as an easy escape to escape a conflict and introduce an end to it, they have serious legal implications.
Prior to signing it is important to know not only what you get which is usually a settlement payment but what you lose as well. The following is a description of the most important rights and opportunities you will be forfeiting by signing a Deed of Release.
Your Right to Sue (Today and in the Future)
The main role of an experienced Deed of Release lawyers Perth is to terminate any legal claims between parties permanently. By signing, you normally consent to:
- Disinvest the other party of claims.
- Reindicate the right to claim in future concerning the dispute.
- Avoid any proceedings.
Notably, most of the Deeds of Release are written in generic terms. They can include not just known claims but unknown or unanticipated claims which occur as a result of the same situation. This implies that you may not be allowed by law to act even after you may later find a new evidence and more harm to the same person.
In a way, you are selling your legal rights to quality and permanence.
Your Leverage
Your bargaining power is before settlement. The leverage is the risk of litigation or regulatory complaints, reputational exposure or the continued disruption of business.
After you have signed a Deed of Release:
- The conflict is deemed to be solved.
- The power to bargain additional pay is lost.
- You lose the power to blow it out of proportion.
Once you feel that the settlement value was not reasonable, you are usually not given a second chance to reconsider the deal except in the case of fraudulent or misrepresentative conduct or some extraordinary events.
The Capacity to make public statements.
A lot of Deeds of Release contain confidentiality and non-disparagement clauses. These are the provisions that can deprive you of:
- Taking the conflict into the streets.
- Publicity of the amount of settlement.
- Critiquing the other party.
- Disclosing information to the workplace colleagues, clients or press.
There are instances that all you can do is only share limited information with close members of the family, accountants or legal counsel.
Violation of confidentiality requirements may result in lawsuits and settlement fines. With your signature, you can be waiving your right to tell your side of the story before the crowd.
Employment-Related Rights
A Deed of Release can also be very effective in employment disputes. Employees might be foregoing rights including:
- General protections claims
- Unfair dismissal claims
- Discrimination/Harassment complaints.
- Unpaid entitlement claims (which are generally drafted broadly)
As part of the agreement, you may also have to resign thus, giving up the rights to reinstatement.
Also certain acts involve the recognition that you have been awarded all the rights that you are entitled to taking away your right to assert claim later on unpaid wages, bonuses or commissions.
Special cautions need to be taken to make sure that you do not end up waving statutory rights inadvertently.
Allegations of Related Parties
Most Deeds of Release are written so as to protect not only the other party to the contract but a broad category of entities and persons, including:
- Directors and officers
- Employees and contractors
- Parent and subsidiary companies.
- Successors and assigns
This implies that you might be forfeiting rights to claim against persons who were instrumental in the conflict though they may not be signatories of the act.
These release clauses may be broad and may go even beyond their anticipated scope.
The Right of Reopening the Matter.
An effectually carried out Deed of Release is binding. It is not merely a contract but a deed, and this may be enforced without consideration in the classical sense of this term.
Once signed:
- You are not able, as a rule, to pull out of it.
- You cannot change your mind
- You cannot find a second negotiation.
This is because courts do not readily reverse Deeds of Release unless there is evidence of grievous conduct, e.g. fraud, duress, unconscionable conduct or misleading representations.
Contract signing without proper knowledge of the implications can thus be long term consequences.
Possible Tax and Financial Impact
You can also be committing yourself to the financial format of your settlement by signing. The action can be a distribution of sums between wages, damages, penalties, or ex gratia payment.
These categories are capable of influencing:
Tax treatment
- Superannuation obligations
- Eligibility Government benefits.
A financial breakdown is not easy to change once settled on. This may seem to be a simple lump sum, but in reality, there may be financial consequences.
Why Legal Advice Matters?
A Deed of Release is frequently provided at the last step in negotiations with urgency or an implication of pressure to sign. But this is where great attention should be paid.
Before signing, you should:
- Examine the extent of the release clause.
- DE firm what are the claims being waived.
- Determine the value and the risks of your claim in the compensation.
- Know the rules of confidentiality.
- Consider tax consequences
In most instances, the other party anticipates that you seek independent advice of counsel. There are actions that one needs confirmation that they have performed.
Final Thoughts
There is closure and certainty in a Deed of Release but it is a price. By signing, you are usually foregoing your right to be able to sue, negotiate additional payment, publicly discuss the conflict, and rethink the case in the future.
The settlement may be an effective and implementable solution. But it must be done in a state of knowing what you are giving up. When you have been given a Deed of Release, it may well be advisable not to depend upon a general counsel before signing it, but only to have a special one, which will be of good value now and over the coming years.
