Get A Release

Last month, we examined whether a release a dealership receives is effective. As we discussed, a release is a contract. It requires offer, acceptance, and consideration.

If you are going to give something of value you do not already owe, make sure it resolves the matter. Get a release so that the customer cannot take what you have offered and continue anyway with a lawsuit or some other complaint.

Here are some critical issues to consider when preparing a release.

  • Keep it simple. Settling sometimes involves salesmanship to convince a customer to save the expenses and time of a lawsuit or a governmental complaint. The consumer may reject a settlement if it involves a multi-page document filled with boilerplate and legal jargon.
  • Any dispute between a car dealership and a customer will probably involve a vehicle. The vehicle should be described so that there is no misunderstanding about the subject of the dispute.
  • It is important that you fully describe the basis for the dispute. You want a release of any claims that could arise from that incident, so make sure it is accurately described.
  • Describe clearly what value the dealership will be providing to the customer. Make sure it is not something the dealership already indisputably owes. That extra value is the consideration, key to making the release effective. If the customer is to provide anything, that should also be listed.
  • Make sure there is specific language within the document noting that what is being provided is in full satisfaction of the customer’s claims and that the customer is releasing any claims against the dealership. Be clear about what the customer is giving up: (i) the right to file a lawsuit, (ii) the right to file with a complaint-handling agency, and (iii) the opportunity to disparage the dealership.
  • If the customer’s vehicle is co-owned, make sure both owners sign the release.