California Civil Code Section 1542: Overview, definition, and example
What is California Civil Code Section 1542?
California Civil Code Section 1542 is a legal provision that limits the scope of general releases in contracts. It states that a release does not extend to claims that the releasor (the person releasing the claims) does not know or suspect to exist at the time of signing the release. Specifically, Section 1542 provides that a person cannot waive claims they are unaware of, and it ensures that any release of liability is not so broad as to inadvertently cover unknown future claims.
Why is California Civil Code Section 1542 important?
Section 1542 is important because it protects individuals from unknowingly waiving rights to claims they have not yet discovered. In many cases, especially in settlements or severance agreements, a party may be asked to release any potential claims against another party. However, this provision ensures that the release cannot waive claims the party is unaware of at the time, such as future legal claims or damages not yet apparent. This protects individuals from inadvertently giving up their rights to unknown causes of action.
Understanding California Civil Code Section 1542 through an example
Suppose an employee signs a severance agreement that includes a general release of claims against the employer. Without Section 1542, the release could theoretically extend to claims the employee is unaware of, such as a potential future discrimination claim that has not yet manifested. However, under Section 1542, the release would not apply to any claims the employee does not know exist at the time of signing, ensuring they retain the right to pursue those future claims.
Example of how California Civil Code Section 1542 may be referenced in a contract
Here’s how a reference to California Civil Code Section 1542 may appear in a release or settlement agreement:
"The Releasor acknowledges and agrees that this release does not extend to any claims that the Releasor does not know or suspect to exist at the time of signing, as provided under California Civil Code Section 1542. The Releasor waives any rights under Section 1542 to the fullest extent permitted by law."
Conclusion
California Civil Code Section 1542 plays an essential role in ensuring fairness and protecting individuals from unknowingly waiving unknown claims in legal agreements. By preventing broad, all-encompassing releases, it provides a safeguard for individuals, ensuring they can pursue legal action for claims they are not yet aware of. Anyone entering into a release or settlement agreement in California should carefully consider the implications of Section 1542 to understand the limits of the waiver.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.