Test Your Knowledge of Rules for Form Releases
Dealers often request a form release so they can protect themselves from litigation when compensating customers. But a release only protects a dealer if it is effective. If a court finds it to be unenforceable, what good is it?
Let’s explain a little first. A release is a contract. That means it requires:
- an offer (terms on which one party will settle a claim)
- acceptance (terms to which the other party agrees), and
- consideration (some value)
Depending on the circumstances, compensation to a customer is not necessarily consideration.
If there is no consideration, a release will not be effective. Whether a release is effective can be complicated. If you have questions about whether you should seek a release in a specific situation, consult your legal advisor.
Spot Effective Releases
Take our short quiz to see how well you understand form releases. Read these common dealer situations – then ask yourself, is it effective or not?