Startups move fast - and sometimes things don’t go as planned. Whether you’re resolving a dispute, parting ways with a contractor, or running a risky beta test, a waiver and release agreement can be a key risk management tool.
Used correctly, it can protect your startup from future claims and close the door on legal exposure.
What Is a Waiver and Release?
It’s a legal agreement where one party:
- Waives (gives up) a right—usually the right to sue
- And releases the other party from legal claims
Waivers are often part of other agreements, such as severance, settlement, or participation forms. They're commonly used in employment, customer-facing, and partnership contexts.
When Startups Use Them
- Employee separations: Used in severance agreements to waive wrongful termination or discrimination claims.
- Settlement of disputes: To resolve a contractor or customer dispute without litigation.
- Product releases or trials: When beta testers or users engage with something experimental or high-risk.
- Event participation: If you're hosting a company retreat or public-facing event where there’s physical activity.
Key Clauses to Include
- Release of Claims: A list of all the legal claims the party is waiving (employment, IP, breach of contract, etc.). This must be clear and specific.
- Waiver of Unknown Claims: Some states (like California) require special language (e.g., Civil Code §1542) to effectively waive future or unknown claims.
- No Admission of Liability: Make it clear that by signing, neither party is admitting wrongdoing.
- Confidentiality and Non-Disparagement: Optional, but commonly added in settlement or exit situations.
- Review Period: In employment settings, particularly for employees over 40, federal law requires that the employee has time to review and revoke the agreement.
Enforceability Tips
- Voluntary and informed: Courts won’t enforce waivers that are deceptive, overly broad, or signed under pressure.
- State-specific rules: Some states don’t allow waivers for certain claims (like wage violations). Know your jurisdiction.
Mutual releases: In many deals, both parties agree to release each other.
Final Thoughts
Waivers and releases can’t protect you from everything - but they’re powerful tools when used wisely. Whether you're resolving disputes or managing beta risk, we can help you tailor these agreements to keep your startup protected and moving forward.
Frequently Asked Questions
FAQs
What is the main purpose of a waiver and release agreement?
It protects your startup by having another party waive their right to bring certain legal claims against you.
Are waiver and release agreements always enforceable?
Not always. Courts require the agreement to be clear, voluntary, and compliant with state-specific laws. Some claims, like wage or workers’ compensation rights, may not be waived.
Do employees need extra protections when signing a waiver?
Yes. Federal law requires review and revocation periods in certain situations, especially for employees over 40. This ensures the agreement is fair and enforceable.
Can a waiver and release be mutual?
Yes. In many settlements, both parties agree to release each other from claims, creating a clean break for both sides.
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