California Code of Civil Procedure Section 1542 precludes the waiver of unknown claims unless the protections of the section are expressly relinquished. In order to effectively waive the protections of California Code of Civil Procedure Section 1542, the language of the statute must be included in any agreement, and the parties to the agreement must acknowledge that they are waiving the rights and benefits of the statute. These requirements are not new, but the California legislature recently amended the statutory language required to be included in any waiver.
Effective January 1, 2019, Section 1542 now reads:
While the changes are subtle – (1) adding "or releasing party"; (2) replacing "which" with "that"; and (3) changing "must" to "would" – it is imperative that the new language is used in all agreements containing Section 1542 waivers going forward to ensure their enforceability. This means keeping an eye out not just in settlement agreements, but in every document that contains a Section 1542 waiver – from contractual amendments to severance agreements to transactional documents and everything in between. Additionally, to the extent you have template documents containing Section 1542 waivers, they should be updated to include the new statutory language.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.