Update Your California Release Provisions to Include Amended Section 1542 Language

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Going forward, the updated text of Section 1542 should be included in all general releases that have a California nexus.

April 2, 2019
Amy L. Pierce & William S. Hale, P.E. - Gravel2Gavel Construction & Real Estate Blog

Most companies have been involved in a situation where they want to end their relationship with another company, or with an employee, and to permanently terminate their mutual obligations (e.g., a settlement agreement resolving end-of-project litigation). In 1992, a California Court of Appeals, in Winet v. Price, confirmed that upholding general releases is “in harmony… with a beneficial principle of contract law: that general releases can be so constructed as to be completely enforceable.”

In California, agreements with a release of claims (or s general release) include what is often referred to as a California Civil Code § 1542 waiver for the purpose of ensuring that the releasing party is consciously releasing both known and unknown claims that may be later discovered. Such a waiver provision generally confirms that the Releasing Party acknowledges that it understands and waives the provisions of Section 1542, followed by the quoted text of Section 1542 (typically in all capital letters).

Reprinted courtesy of Amy L. Pierce, Pillsbury and William S. Hale, Pillsbury
Ms. Pierce may be contacted at amy.pierce@pillsburylaw.com
Mr. Hale may be contacted at william.hale@pillsburylaw.com


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