MUTUAL RELEASE OF CLAIMS

(Illinois Law – Comprehensive Form)

[// GUIDANCE: This template is drafted for matters governed by Illinois contract law. Review carefully before use in employment-related or consumer contexts, which may trigger additional statutory requirements.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

Mutual Release of Claims (this “Agreement”) made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

• [RELEASOR LEGAL NAME], a [STATE] [ENTITY TYPE/INDIVIDUAL] with its principal place of business/residence at [ADDRESS] (“Releasor”); and

• [RELEASEE LEGAL NAME], a [STATE] [ENTITY TYPE/INDIVIDUAL] with its principal place of business/residence at [ADDRESS] (“Releasee”).

Releasor and Releasee are sometimes referred to individually as a “Party” and collectively as the “Parties.”

Recitals

A. A dispute, potential dispute, or other asserted or unasserted claims have arisen between the Parties.
B. The Parties desire to resolve fully and finally any and all Claims (as defined below) upon the terms and conditions set forth herein and for the consideration described below.

NOW, THEREFORE, in consideration of the mutual covenants herein and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, the following terms shall have the meanings set forth below and shall apply equally to the singular and plural forms:

“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person.

“Claim” means any and all past, present, or future claims, counterclaims, demands, actions, causes of action, suits, debts, dues, sums of money, accounts, reckonings, bonds, bills, specialties, covenants, contracts, controversies, agreements, promises, variances, trespasses, damages, judgments, extents, executions, liabilities, and obligations of every kind and nature whatsoever, whether known or unknown, suspected or unsuspected, fixed or contingent, in law, equity, or otherwise, that a Party ever had, now has, or hereafter can, shall, or may have against the other Party or any Released Party arising out of, relating to, or in connection with any matter occurring on or before the Effective Date.

“Person” means any natural person, corporation, limited liability company, partnership, joint venture, association, trust, unincorporated organization, governmental authority, or other entity.

“Released Parties” means, with respect to a Party, such Party and its past, present, and future Affiliates, and each of their respective predecessors, successors, assigns, shareholders, members, partners, officers, directors, employees, agents, representatives, insurers, and attorneys.

3. OPERATIVE PROVISIONS

3.1 Mutual Release.
(a) Releasor, for itself and on behalf of its Released Parties, hereby irrevocably and unconditionally releases, acquits, and forever discharges Releasee and Releasee’s Released Parties from any and all Claims.
(b) Releasee, for itself and on behalf of its Released Parties, hereby irrevocably and unconditionally releases, acquits, and forever discharges Releasor and Releasor’s Released Parties from any and all Claims.

3.2 Scope; Unknown Claims. Each Party expressly waives and relinquishes, to the fullest extent permitted by applicable law, any rights or benefits it may have with respect to unknown Claims, including those that may arise under any principle of law that would otherwise limit the scope of this release to known Claims.

3.3 Excluded Matters. Notwithstanding Section 3.1, the following are expressly excluded (“Excluded Matters”):
(a) Obligations under this Agreement;
(b) [OPTIONAL: obligations under any surviving written agreement dated ___]; and
(c) [OPTIONAL: statutory claims that cannot be released as a matter of Illinois public policy.]

3.4 Consideration. In exchange for the releases herein, [RELEASEE OR RELEASOR] shall pay [CONSIDERATION AMOUNT (e.g., “Ten Dollars ($10.00) and other good and valuable consideration”)] to [COUNTERPARTY] by [PAYMENT METHOD] on or before [DATE]. The Parties acknowledge the adequacy and sufficiency of such consideration.

3.5 Covenant Not to Sue. Each Party covenants and agrees not to commence, aid, or participate in any action or proceeding against any Released Party with respect to any Claim released herein, except to enforce this Agreement or with respect to any Excluded Matter.

3.6 No Admission of Liability. This Agreement is the result of a compromise and shall not be construed as an admission of liability by either Party.

3.7 Further Assurances. Each Party shall execute and deliver such additional documents and take such further actions as may be reasonably requested to effectuate the intent of this Agreement.

4. REPRESENTATIONS & WARRANTIES

4.1 Authority and Capacity. Each Party represents and warrants that:
(a) It has full power and authority to enter into and perform this Agreement;
(b) The execution and delivery of this Agreement have been duly authorized by all requisite action;
(c) This Agreement constitutes a valid and binding obligation, enforceable against such Party in accordance with its terms; and
(d) No consent of any third party is required for its effectiveness.

4.2 No Prior Assignment. Each Party represents and warrants that it has not assigned or otherwise transferred any Claim or right released herein.

4.3 Reliance. Each Party acknowledges that the other Party is entering into this Agreement in reliance upon the foregoing representations and warranties, all of which shall survive the execution hereof.

5. COVENANTS & RESTRICTIONS

5.1 Confidentiality. Except as required by law or court order, the Parties shall keep the terms of this Agreement confidential and shall not disclose them to any third party other than their respective counsel, accountants, or tax advisors who are bound by confidentiality obligations.

5.2 Non-Disparagement. Each Party agrees not to make any statement, written or oral, that disparages the other Party or any of its Released Parties in connection with the subject matter of this Agreement.

[// GUIDANCE: Remove Sections 5.1 and 5.2 if confidentiality or non-disparagement is not needed or unenforceable in specific circumstances (e.g., certain employment contexts).]

6. DEFAULT & REMEDIES

6.1 Breach. A “Breach” occurs if a Party materially violates any term of this Agreement, including the covenant not to sue or confidentiality provisions.

6.2 Notice and Cure. The non-breaching Party shall provide written notice specifying the nature of the Breach. The breaching Party shall have [10] days to cure, unless the nature of the Breach makes cure impossible.

6.3 Remedies. In addition to any other remedy available at law or equity, the non-breaching Party may:
(a) Seek specific performance or injunctive relief;
(b) Recover damages, including reasonable attorneys’ fees and costs incurred in enforcing this Agreement; and
(c) Offset any amounts owed under this Agreement against any future amounts payable to the breaching Party.

7. RISK ALLOCATION

7.1 Mutual Indemnification. Each Party (the “Indemnifying Party”) shall indemnify, defend, and hold harmless the other Party and its Released Parties (collectively, the “Indemnified Parties”) from and against all losses, damages, liabilities, costs, and expenses (including reasonable attorneys’ fees) arising out of or resulting from any Breach by the Indemnifying Party.

7.2 Limitation of Liability. Except for indemnification obligations, willful misconduct, or fraud, each Party’s aggregate liability under this Agreement shall not exceed the amount of consideration actually paid pursuant to Section 3.4.

7.3 No Consequential Damages. In no event shall either Party be liable for incidental, consequential, special, punitive, or exemplary damages, even if advised of the possibility thereof.

7.4 Force Majeure. Neither Party shall be liable for any delay or failure in performance due to causes beyond its reasonable control, including but not limited to acts of God, war, riot, epidemics, or governmental actions.

8. DISPUTE RESOLUTION

8.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Illinois, without giving effect to its conflict-of-laws principles.

8.2 Forum Selection. Subject to Section 8.3, the Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Illinois for any action arising under or relating to this Agreement.

8.3 Arbitration (Optional).
[SELECT ONE – delete the inapplicable bracketed clause prior to execution]
• [ARBITRATION ELECTED] Any dispute not resolved informally within 30 days shall be finally settled by binding arbitration administered by the American Arbitration Association (“AAA”) under its Commercial Arbitration Rules. The seat of arbitration shall be [Chicago, Illinois]. Judgment on the award may be entered in any court of competent jurisdiction.
• [ARBITRATION NOT ELECTED] The Parties decline arbitration and will resolve disputes exclusively in the courts designated in Section 8.2.

8.4 Jury Trial Waiver (Optional).
[IF APPLICABLE] EACH PARTY KNOWINGLY AND VOLUNTARILY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING OUT OF OR RELATING TO THIS AGREEMENT.

9. GENERAL PROVISIONS

9.1 Amendment; Waiver. No amendment or waiver shall be effective unless in a writing signed by the Party against whom enforcement is sought. No waiver of any breach shall be deemed a waiver of any subsequent breach.

9.2 Assignment. Neither Party may assign or delegate its rights or obligations hereunder without the prior written consent of the other Party, except to a successor in interest to substantially all of its assets.

9.3 Successors and Assigns. This Agreement shall inure to the benefit of and be binding upon the Parties and their respective successors and permitted assigns.

9.4 Severability; Reformation. If any provision is held invalid or unenforceable, such provision shall be narrowly construed or, if necessary, severed, and the remaining provisions shall remain in full force and effect.

9.5 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior or contemporaneous understandings, whether written or oral.

9.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures delivered by facsimile, PDF, or other electronic means shall be deemed originals for all purposes.

9.7 Headings. Section headings are for convenience only and shall not affect interpretation.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties hereto have caused this Mutual Release of Claims to be executed as of the Effective Date.

[// GUIDANCE: If notarization or witness signatures are required (e.g., for real estate-related releases), insert appropriate acknowledgment blocks here.]

END OF DOCUMENT