Purchase Agreement: Mutual Release

by Practical Law Corporate & Securities

A Standard Clause providing a mutual release for use in private M&A agreements, such as a stock or equity purchase agreement. This Standard Clause is designed to extinguish all claims and causes of action that each party and its related persons may have against the other relating to the pre-closing period. It addresses the common concerns of buyers and sellers regarding potential post-closing disputes arising from pre-closing events, such as the operation or management of the company. The clause provides balanced language for both a seller's release of the buyer and a buyer's release of the seller. This Standard Clause also explores critical negotiated exclusions from the release of claims, including carve-outs for fraud and ongoing obligations under the transaction documents.