A deed of release is a formal legal document in which one or both parties agree to release claims they have (or may have) against the other. Once signed, the released claims are extinguished -- they cannot be pursued in court.
Unlike a simple contract, a deed does not require consideration (something of value exchanged by both parties) to be legally binding. This makes it particularly useful in situations where one party is releasing claims without receiving anything in return, or where the consideration may be uncertain.
Deeds also carry a longer limitation period. In most Australian states, a party has 12 years to enforce a deed compared to 6 years for a simple contract. This gives deeds greater durability and enforceability.
Deeds of release have serious legal consequences. Once signed, you generally cannot undo the release or pursue the claims that were released. Always seek legal advice before signing a deed of release, particularly in employment and personal injury matters.
| Feature | Deed | Contract |
|---|---|---|
| Consideration required | No | Yes |
| Limitation period | 12 years | 6 years |
| Witnessing required | Usually yes | No |
| Execution formality | Higher | Lower |
| Must state "deed" | Yes | No |
| Delivery required | Yes | No |
| Enforceability | Stronger | Standard |
The most common use of deeds of release in Australia. When an employee and employer resolve a dispute (unfair dismissal, underpayment, discrimination), both parties sign a deed releasing all claims related to the employment.
Typical Inclusions
Typically includes: settlement payment, release of all employment-related claims, confidentiality obligation, non-disparagement clause, agreed reference.
When businesses resolve a commercial dispute -- breach of contract, debt recovery, partnership dissolution -- a deed of release formalises the settlement and prevents either party from relitigating.
Typical Inclusions
Typically includes: settlement amount and payment terms, mutual release of all related claims, confidentiality clause, no admission of liability.
Insurance companies commonly use deeds of release when settling claims. The insured receives payment and signs a deed releasing the insurer from any further liability related to the claim.
Typical Inclusions
Typically includes: settlement amount, release of insurer from all related claims, release of third parties, acknowledgement that settlement is full and final.
Disputes between landlords and tenants, neighbours, or co-owners can be resolved with a deed of release. The deed extinguishes claims and sets out any ongoing obligations.
Typical Inclusions
Typically includes: release of property-related claims, any remediation obligations, access arrangements, ongoing maintenance responsibilities.
When a personal injury claim is settled out of court, the parties execute a deed of release. The injured party receives compensation and releases the defendant from further liability.
Typical Inclusions
Typically includes: settlement amount, release from all injury-related claims, acknowledgement of medical assessment, indemnity against future claims.
The document must clearly state that it is a deed, typically in the title and recitals. A document that does not identify itself as a deed may be treated as a simple contract.
Individuals must sign in the presence of a witness. Companies can execute under section 127 of the Corporations Act (two directors, or a director and secretary). Some states allow electronic execution.
A deed is not effective until it is "delivered" -- meaning the party shows an intention to be bound. In practice, signing and returning the deed usually constitutes delivery.
The deed should precisely describe the claims being released. Broad "all claims" language is common but should be reviewed carefully to ensure it does not release claims you intend to preserve.
While not required for a deed, including consideration (such as a settlement payment) strengthens the document and demonstrates both parties received value.
Witnessing requirements vary by state. Here is a summary of the current position as of 2026. Always confirm with your legal advisor.
Electronic execution of deeds permitted under the Electronic Transactions Act 2000 (NSW) and Conveyancing Act amendments. Witness can observe via audio-visual link in some circumstances.
Electronic execution permitted under the Electronic Transactions (Victoria) Act 2000. Witnessing requirements apply but can be satisfied remotely in certain cases.
Electronic execution available under the Electronic Transactions (Queensland) Act 2001. Witnessing rules depend on the type of deed.
Check specific state legislation. SA, WA, TAS, ACT, and NT have varying positions on electronic deed execution. When in doubt, use wet ink.
The key difference is consideration. A contract requires consideration (something of value exchanged by both parties), while a deed does not. A deed of release can therefore release claims without requiring a payment in return, though most include a settlement sum. Deeds also have longer limitation periods (typically 12 years vs 6 for contracts).
This depends on the state. NSW, Victoria, and Queensland have enacted laws allowing electronic execution of deeds in certain circumstances. Other states may still require wet ink signatures and physical witnessing. Check your specific state's requirements, and consider having a lawyer confirm the appropriate execution method.
Yes, in most Australian states a deed must be signed in the presence of a witness who also signs. Some states require the witness to be an independent adult (not a party to the deed). For companies, execution under section 127 of the Corporations Act by two directors or a director and secretary may not require a witness.
Use a deed of release when you want to extinguish claims with the strongest possible enforceability, when there may be no consideration flowing both ways, or when you want the longer limitation period. A settlement agreement (simple contract) may suffice for straightforward commercial disputes where both parties are exchanging value.