Since it is a contract, a release is subject to the same validity requirements as a contract. A voluntary release that is obtained in exchange for valuable consideration from an individual who is capable of totally understanding its legal effect is valid. An individual who signs a release has the obligation to read its contents prior to executing it; the person cannot have the release set aside because he or she has not become familiar with its contents. A release is not void merely because the bargain was unwise.
In situations where a release has been executed as a result of a mutual mistake that significantly affects the parties' rights, it can be set aside. In order to ascertain whether a release was executed under mutual mistake, all of the circumstances regarding the signing of the release must be taken into consideration, including the sum paid for release and whether the issue of liability was in dispute at the time the settlement was made.
An innocent MISREPRESENTATION that is relied upon by the releasor justifies setting aside a release induced by it. For example, by relying on a medical diagnosis for an injury sustained, an individual might sign a release in exchange for a particular sum of money. If, subsequently, the individual discovers that the injury is more serious than was indicated by the initial diagnosis, the release can be set aside, since the claims were released based on misrepresentation.
Fraudulent representations made by the releasee and relied on by the individual who gives up the claim for injury will also invalidate a release.