Don’t Sign It Blind: What Waivers of Claims Really Take Away

You’re trying to close a deal, settle something quickly, or move forward with a contract and then, a waiver of claims clause pops up. Maybe you skim it. Maybe no one really explains what it means. But make no mistake, that little section can have some big-time consequences.

At Horn Wright, LLP, our business transaction lawyers in New York don’t believe in letting you get blindsided. We’re here to break down what’s buried in your agreements, point out the landmines, and make sure you’re not giving away more than you realize. 

Because protecting your business and your future shouldn’t come down to a few lines of fine print.

What’s Really Hiding in a General Release Clause? Here’s What You Should Know

General release clauses might seem harmless, but they’re not. One vague sentence tucked into your contract can wipe out your right to take legal action, even for things you haven’t discovered yet. These waivers show up in deals that feel routine but can change everything afterward.

You’ll often find them in:

• Severance deals around Midtown or Wall Street. They may look like a decent payout, but that payment often comes at the cost of giving up your rights. And if something shady happened while you were employed, you may have just signed away your ability to do anything about it. Once it's done, it's nearly impossible to rewind.
• Settlement agreements with a former partner or vendor. You think the issue’s resolved, but a general release might bar you from going back if more dirt surfaces later. It’s common for the more powerful party to sneak in broad release language to protect themselves. These clauses are rarely written with your best interest in mind.
• Real estate contracts involving commercial space or investment properties. You close the deal but later discover serious issues the seller didn’t disclose. If you’ve signed a waiver covering “known and unknown claims,” you may be left holding the bag. That’s a risk most buyers don’t even realize they’ve taken.

If a contract includes a release, don’t panic. But don’t sign it blindly, either. Bring in a professional who can flag what’s fair and what’s a legal trap.

Some Rights Are Off-Limits: Clauses Can’t Erase Everything

Even the broadest waiver in the world can’t erase every legal right. Some things are just too important to sign away, no matter what a contract says. Courts know this, and so should you.

• Discrimination and harassment protections under Title VII of the Civil Rights Act and Section 296 of the New York Executive Law are non-negotiable. You always have the right to report bias or mistreatment, whether it’s based on race, age, gender, or anything else protected by law. If a clause tries to silence that, it’s not enforceable.
• Whistleblower rights under the False Claims Act or Section 740 of the New York Labor Law are another big one. If you expose fraud or wrongdoing, you’re protected. Period. No contract can force you to look the other way.
• Wage and overtime protections under the Fair Labor Standards Act or Article 6 of the New York Labor Law can’t be signed away. If you’re owed money, you’re still owed, no matter what your employer tries to bury in your exit paperwork. Courts will toss out that kind of waiver fast.
• Consumer fraud protection under Section 349 of the New York General Business Law sticks with you. If you were misled or scammed, that waiver won’t shield the other side from accountability. Truth still matters, even in business.

If any of these apply to you, you’ve got backup. And if someone pressured you into signing a waiver without fully explaining it, that’s another red flag.

Think Carefully Before You Sign: It Might Cost You Later

It’s tempting to just sign and move on. You’re busy. You want the deal done. But a few minutes of legal review can save you a whole lot of pain later.

• Breach of contract claims may be gone if you’ve released the other party from liability. Even if they completely drop the ball later, you might be stuck. Courts can and do uphold these waivers.
• Fraud and negligence claims could be locked out, too. If someone knowingly misled you or acted recklessly, you’d think you could fight back. But a waiver could slam the door shut before you even get to court.
• Future claims? Yep, those too. Some releases are so broad they include things you haven’t even experienced yet. That’s not just unfair. It’s dangerous.

This is especially risky if you’re a founder or startup leader navigating business formation for the first time. The excitement of launching something new makes it easy to gloss over the fine print.

How to Spot a Waiver That’s Not Working in Your Favor

Not every waiver is terrible, but the bad ones have some pretty clear tells. If something feels off, trust that instinct. Here’s what to look out for:

• Vague or sweeping language like “all known and unknown claims.” That’s a massive red flag. It’s vague on purpose, and it gives the other side way too much cover.
• Waivers that apply to future events, even ones unrelated to the contract. That’s a sign they’re trying to prevent you from taking action, no matter what happens down the road.
• No carve-outs listed. If there’s no mention of your statutory rights or exclusions, that’s a problem. A fair waiver includes exceptions.
• Wall-of-text legal jargon. If it’s too complicated to follow, that’s intentional. A clear contract doesn’t need to feel like decoding a puzzle.

If you’re seeing these signs, it’s time to pause and ask questions. A good contract protects both sides. A bad one hides that imbalance in the details.

Signed a Waiver You Now Regret? Here’s What You Can Still Do

Already signed and having second thoughts? Don’t panic. You’ve still got a shot. Start by asking a few important questions.

• Were you pressured, misled, or rushed into signing?
• Did you fully understand the language and what it meant?
• Did the other party violate their end of the deal after the waiver?

If any of that sounds familiar, you’ve got options.

You can take your case to court. Judges know that contracts aren’t always fair and they’re willing to toss out waivers that go too far. Especially if your rights were never properly explained.

Another option? Renegotiate. If you’re still working with the other party, it might be possible to rewrite the deal. A clearer, fairer agreement can bring both sides back to the table.

You can also get help from the government. If the waiver blocks rights under anti-discrimination or labor laws, agencies like the U.S. Equal Employment Opportunity Commission or Division of Human Rights can investigate. Waivers don’t scare them off.

When things get complicated, you don’t have to go it alone. Our team offers corporate governance legal advice to help you make sense of what’s valid and what isn’t. Because no one should lose their rights to a bad contract.

Talk to Horn Wright, LLP, About Your Rights

At Horn Wright, LLP, our New York business transaction lawyers help people just like you take back control of the contracts in their lives. 

Whether you’re dealing with a severance package, a complex deal, or business sale and purchase agreements, we know how to spot trouble fast. Our litigation attorneys are trusted for a reason.

We’re proud to be named one of the leading law firms in America. But more than that, we’re proud to earn your trust. If something feels wrong, we’ll make it right.

Let’s sit down and figure out the smartest move forward. You’ve got more power than you think and we’re here to help you use it. Call (855) 465-4622 today or leave a message to get started with a complimentary case review.