Indiana and Illinois Personal Injury / Medical Malpractice Lawyers Estates, Wills, and Probate Counselors

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A Conditioned Settlement Must Be Reflected in the Release to Take Effect

A release is a special type of contract that generally gives one party an agreed upon amount of money in exchange for a promise not to file any lawsuits against another person or group of people. Releases help facilitate the orderly settlement of disputes and are highly favored by the courts. Releases serve as a means of settling a case by forever barring further claims or lawsuits. Because of this finality, individuals entering into a release must exercise caution to ensure they fully understand the terms of the release, which person or persons are specifically bound by the contract, and what matters the release covers. Courts look to the standard rules of contract law when interpreting a release, so if the language of the release is clear and unambiguous, the courts will look only to the document itself for answers and will not entertain any outside evidence as to what the parties may have actually intended. For example, in the recent case of Haub v. Eldridge, the Indiana Court of Appeals found that the language of a release agreement was clear and therefore, the plaintiff was bound by the terms of the release, which prevented her from bringing a negligence action against her former contractor. In this case, the plaintiff agreed to sign a release in exchange for $3,500 from her contractor’s insurance company for rupturing a gas line while doing work for the plaintiff. The plaintiff specifically stated in a separate letter to the insurance company that she would accept the settlement for the damages insured by the policy provided she could still pursue a claim against the contractor for other damages and for negligently performed work that was not covered under his insurance policy. Even though the Plaintiff stipulated her acceptance of the settlement on the condition that she was still able to pursue additional claims for negligence and breach of contract, she signed the release agreement without first making sure it reflected those stipulations. As a result, the Court dismissed her lawsuit against the contractor because the release clearly stated that she released and forever discharged the contractor from any and all claims, however arising, up to the date of the release. As the Haub case illustrates, failure to properly read and understand the terms of a release agreement could cost you the opportunity to pursue further claims for damages against an individual or group. Since the release in Haub was clear as to who was covered, what claims were covered, and what the agreed terms were, there was no reason for the court to consider her previously sent letter conditioning her agreement to sign the release on her ability to pursue additional claims against the contractor. The lesson Haub teaches is that it is critically important to not only carefully read all settlement contracts before signing them, but to consult an attorney to make sure all of your interests are properly reflected within the contract, because once signed, both you and the courts are bound to its terms. If you or a loved one were involved in an accident for which compensation may be owed, please call 877-877-LAW2 (5292) or 219-924-2427 for a free consultation with one of our top personal injury attorneys before signing any release agreements.

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