Is it wise to sign a release form that reserves the right for the other party to sue even though I have waived that right?

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Is it wise to sign a release form that reserves the right for the other party to sue even though I have waived that right?

I was in an accident 2 years ago. The insurance company representing the other party declared in the police report to be at fault wants me to sign a liability release form. I consider the amount they are offering adequate, I hadn’t expected anything and hadn’t wanted to pursue a lawsuit. However, one clause of the release form worries me, “This release expressly reserves all rights of the parties released to pursue their legal remedies, if any, against the undersigned, their heirs, executors, agents and assigns”. I called the insurance agent and he politely brushed off my concern.

Asked on June 8, 2012 under Accident Law, Minnesota

Answers:

SJZ, Member, New York Bar / FreeAdvice Contributing Attorney

Answered 9 years ago | Contributor

Of course he brushed off your concern--he's not the one who could be sued later.

As a general matter, it is not wise to give up your right to sue while the other party retains its right to do so, for the obvious reason that you could then be sued for far more than the amount of settlement you received. That's not to say you never would, if you are sufficiently confident that you were not at fault (you are not liable in a car accident if not at fault), or that the other party won't sue, or really want/need the settlement--but you have to bear in mind that you are leaving yourself potentially vulnerable to a lawsuit.

Personally, I advise my clients to not sign one-sided settlements or releases; I believe the release should resolve all liability between the parties.

Once option, if the insurer insists on reserving some right to sue, is to see if you can write in either a short time limit (e.g. they have to bring a suit in the next year) and/or a monetary cap (e.g. the maximum they can recover from you is the amount you received as a settlement)--this at least gives you some comfort as how long you need to worrry about a lawsuit, or how much could be at risk.


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