Question 1

What's the difference between a covenant not to sue and a release?

Accepted Answer

A release eliminates the claim entirely — it's gone forever. A covenant not to sue keeps the claim alive but promises not to act on it. The practical difference: if there are multiple potential defendants, a release of one might inadvertently release all of them (depending on jurisdiction), while a covenant not to sue only affects the specific party named.

Question 2

Is a covenant not to sue enforceable?

Accepted Answer

Yes, as long as it's supported by consideration (something of value exchanged). In a settlement, the consideration is usually money or mutual promises. A one-sided covenant with nothing in return might not hold up. Courts enforce them as regular contract provisions.

Question 3

What happens if I sue despite signing a covenant not to sue?

Accepted Answer

The other party will raise the covenant as an affirmative defense and likely get your case dismissed. You could also face liability for breaching the covenant itself — including paying the other party's legal fees for having to defend against a lawsuit you promised not to bring.

Question 4

Can a covenant not to sue cover future claims?

Accepted Answer

It can, but courts scrutinize broad covenants that cover unknown future claims more carefully than those covering specific existing disputes. A covenant covering 'any and all claims arising from our partnership' is broader than one covering 'claims related to the Q3 2024 delivery dispute.' Broader covenants need clearer language to be enforceable.

Question 5

Should I use a release or a covenant not to sue?

Accepted Answer

If there's only one potential defendant, a release is simpler and more definitive. If there are multiple potential defendants and you only want to resolve things with one of them, use a covenant not to sue — it preserves your claims against the others. When in doubt, a release is the cleaner option.

Covenant Not to Sue

Definition

In Practice

Common in these contract types

Related terms

Frequently asked questions about covenant not to sue

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