A deed of release is a legal document that removes a previous claim on an asset or resolving a dispute or end up in form of agreement. It provides documentation of release from a binding agreement. A deed of release might be included when a lender transfers the title of real estate to the homeowner upon satisfaction of the mortgage. A deed of release literally releases the parties from previous obligations. The person who executes or makes the Release Deed is known as “Releasor” and the person in whose favour it is executed is known as “Releasee”. A Release deed is different from other documents such as Receipt, which merely evidences payment. A Release deed, on the other hand, signifies the satisfaction or termination of a condition or a right.
An Agreement to release in future is also valid as any other contract, if it otherwise satisfies legal requirements. Such an agreement does not operate immediately, but will entail a further document such as Release Deed and can also be made enforceable. A Release can be made for consideration, that is, ‘payment’ or a ‘price’. It can also be made without receiving any payment or consideration. The stamp duty and registration charges may differ based on whether price or consideration is received or the Deed is executed without receiving any payment or consideration.
Types of Release Deed
i) Commercial dispute
When commercial dispute resolved between parties, resulted with a deed of settlement.
ii) Employment Contract
An employer may give an employee a deed of release as part of a redundancy or other termination agreement.
iii) Personal guarantee
To end a personal guarantee and escape the liability it imposes is with a deed of release.
iv) Loan or Credit agreement.
To finalise a mortgage or other finance agreement is with a deed of release.
When can Release Deed become invalid?
- Undue Influence
- Misrepresentation – That the executants had given his consent on the basis of an innocent misrepresentation
- Being led to believe as true, something which the person deceiving knows is false.
- Actively concealing a material fact
- Making a promise without intention to perform
- Any other deception or any act statutorily declared as fraudulent.