Skip to content
FixMyContract
All terms
Photograph of an open blank book with an orange ribbon bookmark

Glossary

DisputesUpdated Sep 23, 2026

What Is a Release Clause in a Contract?

A release clause is a promise to give up claims against the other party, for example claims about past work or a dispute being settled. Once a release is signed, the claims it covers may not be brought later. A release can cover known claims only, or also claims you do not yet know about.

Analyze my contract — freeFull mechanics: 7 Things to Negotiate Before You Sign a Contract (2026)

Why it matters

Releases appear in settlements, severance papers and final-payment forms. Signing one can end claims you did not realize you had.

How common is it?

In the LexGLUE version of LEDGAR, a research set of 80,000 contract provisions from SEC filings, each labelled with one of 100 common provision types, 772 (0.96%) are labelled "Releases". That is a share of provisions, not of contracts. It is the 34th most common of the 100 provision types in this set.

These are provisions from contracts that public companies filed with the SEC — a reference point, not a rule for your contract.

Source: LEDGAR (Tuggener et al., 2020), LexGLUE version (Chalkidis et al., 2022), CC BY 4.0. Counts are ours.

What to watch for

  • Wording that covers claims “known or unknown.”
  • A release that also covers the other side's affiliates, staff and customers.
  • A release that takes effect before you have received the payment it is exchanged for.

A realistic example

A contractor signs a final invoice form to get paid. It includes a release of “all claims,” including an unpaid change order the contractor meant to raise later.

What to ask for

  1. A release limited to the matter being settled, with named exceptions.
  2. The release to take effect only once payment is received.

Related terms: covenant not to sue · indemnification · hold-harmless clause

Related guide: 7 things to negotiate before you sign a contract

See how the release clause reads in your contract — 👉 Analyze your contract free — your first analysis is free, no card, no deadline to use it.

Not legal advice. This is an educational definition of a common contract term. Details vary by jurisdiction — this page explains common U.S. usage. For high-stakes agreements, have a lawyer review the final version.