We use cookies to improve security, personalize the user experience,
enhance our marketing activities (including cooperating with our marketing partners) and for other
business use.
Click "here" to read our Cookie Policy.
By clicking "Accept" you agree to the use of cookies. Read less
Understanding Covenant Not to Sue: Definition and Legal Context
Definition & Meaning
A covenant not to sue is a legal agreement where a person with a potential claim against another party agrees not to pursue that claim. This type of covenant does not eliminate the underlying cause of action, nor does it release any other parties who may also be liable for the same issue. Essentially, it allows the claimant to forgo legal action while retaining the right to pursue claims against other parties if necessary.
Table of content
Legal Use & context
Covenants not to sue are commonly used in various areas of law, including environmental law, contract disputes, and tort claims. In environmental law, for instance, these covenants facilitate the redevelopment of contaminated properties by assuring developers that they will not face liability for past contamination once the site is cleaned to current standards. Users can often manage these agreements through legal forms and templates available on platforms like US Legal Forms.
Key legal elements
Real-world examples
Here are a couple of examples of abatement:
For instance, a business may enter into a covenant not to sue a former partner over a dispute regarding profit-sharing. In this case, the business agrees not to pursue legal action against the partner but retains the right to seek damages from other parties involved in the dispute.
(Hypothetical example) A property developer obtains a covenant not to sue from the state after cleaning up a contaminated site, ensuring that they will not be held liable for any future environmental issues related to past contamination.
State-by-state differences
Examples of state differences (not exhaustive):
State
Key Differences
California
Commonly used in environmental settlements.
Texas
May be used in contract disputes to limit future claims.
New York
Often included in settlement agreements to resolve litigation.
This is not a complete list. State laws vary, and users should consult local rules for specific guidance.
Comparison with related terms
Term
Definition
Key Differences
Covenant not to sue
An agreement not to pursue a legal claim.
Does not extinguish the claim or release other parties.
Release of liability
A legal document that frees one party from liability.
Typically extinguishes the right to sue for the released claims.
Settlement agreement
A contract resolving a dispute between parties.
Often includes a covenant not to sue as part of the resolution.
Common misunderstandings
What to do if this term applies to you
If you are considering entering into a covenant not to sue, it is essential to understand the implications fully. Review the agreement carefully, and consider consulting with a legal professional to ensure your rights are protected. You can also explore ready-to-use legal form templates on US Legal Forms to help you draft or manage such agreements effectively.
Find the legal form that fits your case
Browse our library of 85,000+ state-specific legal templates.