Releasor: Overview, definition and example
What is a releasor?
A releasor is the person or party in a contract who agrees to give up their right to make future claims or legal actions against another party, typically the releasee. When a releasor signs a release, they are voluntarily waiving their right to hold the releasee accountable for any future disputes or issues that might arise related to the matter at hand.
Why is a releasor important?
A releasor is important because they are the one who relinquishes any potential legal claims, providing legal certainty to the releasee. By defining the releasor’s role in an agreement, businesses can avoid future litigation and disputes, ensuring that the releasor cannot bring further legal actions over the agreed-upon issue. For businesses, this helps close out potential liabilities tied to specific events or transactions.
Understanding releasor through an example
Imagine a small business, XYZ Corp, settles a dispute with a customer who claimed defective products were sold. As part of the settlement, the customer agrees to release XYZ Corp from any future claims related to the product. In this case, the customer is the releasor, as they are giving up their right to pursue any further legal action or claims against the company.
In another example, a contractor who was injured on a job site might sign a release form agreeing not to sue the company responsible for the injury. By doing this, the contractor is acting as the releasor, and they are waiving their right to take legal action in the future.
An example of a releasor clause
Here’s how a releasor clause might look in a contract:
“The Releasor agrees to release and discharge the Releasee from any and all claims, demands, or causes of action arising out of the incident described in this Agreement.”
Conclusion
A releasor is a party that waives their right to make future legal claims in exchange for a settlement or agreement. Understanding the role of the releasor is key for businesses to manage risk and ensure that all claims are resolved without the possibility of future disputes. By clearly defining the releasor's responsibilities in a contract, businesses can mitigate ongoing legal exposure.
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.