A deed of release and settlement is often used to resolve workplace disputes, commercial disagreements, or litigation. When valid, it brings closure and prevents future claims.
But not every deed of release is enforceable. Courts may set aside a deed if it was obtained unfairly, illegally, or not executed properly.
In this article, our contract lawyers explain the main circumstances in which a deed of release and settlement may be set aside, the legal principles applied by Australian courts, and what this means for individuals and businesses before signing such an agreement.
Key Takeaways
A deed of release may be invalid if signed under duress, undue influence, fraud, or misrepresentation.
Illegal deeds or those against public policy are unenforceable in Australia.
A deed may be set aside if it is not executed correctly or a party lacks capacity.
Courts look at whether the deed was entered into freely, fairly, and lawfully.
Businesses and individuals should seek contract law advice before signing a deed of release.
Grounds for Setting Aside a Deed of Release
Courts in Australia recognise several reasons why a deed of settlement and release may be unenforceable.
For a clearer understanding of the basics, you might also find helpful our related article on what a deed of release is and how it works.
Reasons for setting aside a Deed include:
Duress and Undue Influence
If you were pressured into signing a deed of release by your employer or another party, the deed may be unenforceable.
Duress includes threats of job loss or financial harm, while undue influence involves unfair pressure from someone in a position of trust.
Case Example: McPhie v McPhie [2010] HCA 12 – a deed was set aside where one party threatened to cancel a property sale unless it was signed.
Fraud or Misrepresentation
A deed may be set aside if it was obtained through fraud, deceit, or false representations.
Case Example: Eales v Waller [2000] QCA 405 – a deed was invalid because one party lied about the settlement sum.
Case Example: Mitchell v Raza [2003] NSWCA 240 – a deed signed under the threat of employment termination was set aside.
Illegality and Public Policy
A deed that attempts to override statutory rights or involves illegal consideration will not be enforceable.
For example, a deed cannot waive obligations under workers’ compensation or child support law.
Case Example: Pearson v State of New South Wales [2011] NSWCA 31 – deed unenforceable where it was signed in exchange for not pursuing a workers’ compensation claim.
Case Example: State of NSW v Pyne [2002] NSWCA 58 – deed set aside because it involved discontinuing criminal proceedings, which was unlawful.
Invalid Execution or Lack of Capacity
A deed must meet formal legal requirements, including being in writing and properly signed.
If these requirements aren’t met, or if a party lacks the capacity to understand the agreement, the deed may be set aside.
Case Example: Cooper v Hobart City Council [2010] TASSC 47 – deed invalid because the signatory had a brain injury and lacked capacity.
Frequently Asked Questions
What is a deed of release and settlement?
It is a legal document that resolves disputes and prevents future claims. Common in employment law disputes, business contracts, and litigation settlements.
Can I set aside a deed of release if I was pressured to sign?
Yes. If you signed under duress or undue influence, a court may declare the deed unenforceable.
Can a deed of release override my statutory rights?
No. Deeds cannot remove automatic obligations under Australian legislation such as workers’ compensation laws.
What happens if a deed of release is set aside?
If invalid, the deed has no legal effect and the parties are restored to their original positions.
Do I need a lawyer to review a deed of settlement?
Yes. Legal advice helps ensure the deed is fair, enforceable, and compliant with Australian law.
About the Author
Farrah Motley
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