Settlements are the results of dispute resolutions that we make for ourselves. To avoid the uncertainties of having third parties resolve our disputes, we rewrite our own relationships. In franchise relationships, which can be complicated and have long-term commitments, releases have special uses so that the parties can put issues behind them. This article focuses on certain issues recurrent in franchise arrangements that continue to require additional attention.
Generally, a release is treated as a contract subject to the rules of contract construction; the effect of the release is determined by the ordinary meaning of its language. It is the court’s task to interpret a contract and its effect, the primary inquiry being the intent of the parties at the time the release was executed. The effect of a release is to be determined by the ordinary meaning of its language, however, improvident the release may subsequently prove to be. For these reasons, after the parties have laid down their arms, the focus should be on crafting the enforceable release. Where a written agreement purports to encompass the parties’ entire agreement, parol evidence to vary, modify or supersede the written contract is inadmissible absent a finding of fraud, accident or mistake.
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