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Legal Exclusion Agreement

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LEGAL EXCLUSION AGREEMENT

This Legal Exclusion Agreement (the "Agreement") is made and entered into as of the Effective Date: , by and between Party A: , an entity organized as under the laws of , with a principal place of business or residence at , and Party B: , an entity organized as under the laws of , with a principal place of business or residence at (each a "Party" and collectively the "Parties").

RECITALS

WHEREAS, the Parties have negotiated certain agreements, transactions or communications (collectively, the "Underlying Matters") and wish to exclude specified claims, assets, obligations or subject matter from any release, waiver or settlement provided elsewhere; and

WHEREAS, the Parties desire to set forth expressly those items, claims and obligations that are to remain excluded from any present or future release, discharge or covenant not to sue between the Parties; and

WHEREAS, the Parties intend that this Agreement operate as a clear statement of exclusions without limiting other rights or obligations expressly preserved by separate agreement.

NOW, THEREFORE, in consideration of the mutual covenants contained herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

1.1 "Excluded Claims" shall mean those claims, causes of action, demands, rights, liabilities and remedies specifically identified in Section 2 of this Agreement and any claim arising directly out of or relating to the Excluded Items. Excluded Claims do not include claims that are expressly released in a separate written instrument executed by the Party asserting the claim.

1.2 "Excluded Items" shall mean the assets, transactions, obligations, periods, persons or topics identified in the Schedule of Exclusions attached hereto or described in the field below.

2. EXCLUSIONS

2.1 The Parties agree that the following items are expressly excluded from any release, waiver, settlement, assignment or covenant not to sue between the Parties and shall remain preserved for assertion by the affected Party:

2.2 Specific examples of Excluded Claims include, without limitation, tort claims relating to personal injury, criminal claims, claims for fraud, claims based on gross negligence or willful misconduct, tax liabilities, and claims that by law cannot be waived or released.

3. EFFECT ON OTHER AGREEMENTS

3.1 Except as expressly limited herein, nothing in this Agreement shall be construed to modify, amend or supersede any other written agreement between the Parties except to the extent expressly stated in a writing signed by both Parties. To the extent of any inconsistency between this Agreement and any release or settlement document, the Parties intend that the exclusions set forth herein govern with respect to Excluded Claims.

4. REPRESENTATIONS AND WARRANTIES

Each Party represents and warrants to the other that: (a) it is duly organized and validly existing under the laws of the jurisdiction identified in the opening paragraph; (b) it has full power and authority to execute and deliver this Agreement and to perform its obligations hereunder; and (c) the execution, delivery and performance of this Agreement do not and will not violate any applicable law or any agreement to which it is a party.

5. CONFIDENTIALITY

Unless otherwise agreed in writing, the existence and terms of this Agreement shall be treated as Confidential Information by the Parties. Disclosure of the Agreement is permitted to the extent necessary for enforcement, tax reporting, bona fide legal counsel, auditors, or as required by applicable law, provided that the disclosing Party uses reasonable efforts to limit disclosure and to obtain protective measures.

6. INDEMNIFICATION

Each Party (the "Indemnifying Party") shall indemnify, defend and hold harmless the other Party (the "Indemnified Party") from and against any and all losses, liabilities, costs and expenses (including reasonable attorneys' fees) arising out of any claim that falls within the Excluded Claims attributable to the Indemnifying Party's actions or omissions. This indemnity shall survive termination or expiration of this Agreement.

7. COOPERATION

The Parties agree to cooperate in good faith to effectuate the exclusions set forth in this Agreement, including executing further documents reasonably necessary to clarify or implement the Parties' intent that the identified matters remain excluded.

8. NOTICES

Notices to Party A

Notices to Party B

All notices under this Agreement shall be in writing and shall be deemed to have been duly given when delivered personally, sent by nationally recognized overnight courier, or three (3) business days after deposit in the mail, postage prepaid, addressed to the Parties at the addresses set forth above or to such other address as either Party may designate by notice in accordance with this Section.

9. GOVERNING LAW; VENUE

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to choice of law principles. The Parties submit to the exclusive jurisdiction of the state and federal courts located in that State for resolution of disputes arising under this Agreement.

10. MISCELLANEOUS

10.1 Entire Agreement. This Agreement constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior and contemporaneous understandings and agreements, whether written or oral, relating thereto to the extent inconsistent with the exclusions set forth herein.

10.2 Amendments; Waiver. No amendment, modification or waiver of any provision of this Agreement shall be effective unless in a writing signed by both Parties. No failure or delay in exercising any right or remedy shall operate as a waiver thereof.

10.3 Severability. If any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions shall not be affected or impaired thereby, and the Parties shall endeavor in good faith to replace the invalid provision with a valid provision that most nearly effects the Parties' original intent.

10.4 Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. Signatures delivered by electronic means shall be effective to bind the signing Party.

AUTHORITY TO EXECUTE

Each Party represents that the individual signing this Agreement on its behalf is authorized to execute this Agreement and to bind that Party to the terms and conditions contained herein.

Party A:

By:

Date:

Party B:

By:

Date:

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What a Legal Exclusion Agreement Is and When It's Used

A Legal Exclusion Agreement is a written contract used to specify that certain claims, liabilities, or categories of legal responsibility are excluded from a transaction or relationship. Commonly used in commercial settlements, licensing deals, and portfolio transfers, it identifies excluded items, allocates risk between parties, and records mutual understanding about what is not conveyed or guaranteed. The document can be standalone or part of a broader agreement, and should be explicit about scope, effective date, and governing law to reduce ambiguity and support enforceability in courts or administrative proceedings.

Why Clear Exclusions Matter to Risk Allocation

A Legal Exclusion Agreement narrows exposure, clarifies transactional scope, and reduces future disputes by documenting precisely what is excluded. Clear exclusions facilitate risk allocation, streamline due diligence, and provide courts or arbitrators with express contractual evidence of the parties' intent.

Why Clear Exclusions Matter to Risk Allocation

Who Typically Prepares and Signs These Agreements

Typical users include corporate counsel, contracting parties, risk managers, and deal teams preparing exclusions in sales, settlements, or licensing transactions.

  • In-house legal teams managing transactional risk and drafting contract language for exclusions and carve-outs.
  • Outside counsel negotiating settlement terms where parties agree to release or exclude specific claims.
  • Business owners and executives clarifying asset transfers, warranties, or indemnity limits during M&A or licensing.

Proper use requires coordination between legal, finance, and operational owners to ensure the exclusion aligns with commercial and regulatory obligations.

Typical Signatory Roles

Corporate Counsel

Typically drafts or reviews exclusions, ensures consistency with broader contract warranties and indemnities, and confirms that excluded liabilities are explicitly described. Responsible for advising on choice of governing law and for verifying execution and retention to support later enforcement or regulatory compliance.

Business Executive

Authorizes exclusions to align commercial risk appetite with pricing and deal structure, coordinates with finance and legal teams during negotiation, and documents business rationale. Ensures contractual exclusions do not conflict with statutory obligations or third-party consent requirements.

Essential Information to Include in the Agreement

Parties' Names: Full legal names as on ID
Effective Date: Enter as MM/DD/YYYY format
Excluded Items: List specific assets, claims, or rights
Consideration: Specify dollar amount or exchange terms
Governing Law: State name for dispute interpretation
Signature Blocks: Signer name, title, date

Key Risks and Consequences of Poor Drafting

Ambiguity Risk: Court may interpret contra proferentem
Tax Implications: May trigger tax liability adjustments
Enforceability: Voidable if unconscionable
Regulatory Conflict: Violates statutory duty risks fines
Third-Party Claims: Unreleased creditors may assert liens
Execution Errors: Missing signatures or dates invalidate

Common Preparation Mistakes to Avoid

  • Vague language that fails to identify excluded items precisely, leading to disputes about whether a particular claim falls within the exclusion.
  • Using boilerplate phrases like 'reasonable value' without numerical or definitional context, which creates ambiguity in enforcement and valuation disagreements.
  • Failing to obtain clear authorization from necessary signatories or corporate officers, which can render the exclusion unenforceable against that entity.
  • Not aligning exclusions with related contract provisions (warranties, indemnities, conveyance language), producing internal conflicts that courts must interpret.

Step-by-Step: Complete a Legal Exclusion Agreement

Follow these steps to complete a Legal Exclusion Agreement accurately and reduce execution risk today.

  • 01
    Draft Scope: Describe specific exclusions and exceptions
  • 02
    Define Consideration: State any payment or exchange terms
  • 03
    Assign Law: Select governing state and venue
  • 04
    Sign & Date: Each party signs, prints name, and dates

Where to Send and File Executed Copies

Identify the correct recipients, filing offices, or contract counterparties and confirm delivery methods to ensure the exclusion takes effect as intended.

  • Counterparty: Send executed original to the other contracting party
  • Escrow: Deliver copy to escrow agent if transaction requires custody
  • Regulator: File with agency only when statutory filing required
  • Records: Retain executed copy in company contracts repository

Download, Save, and Attach Supporting Documents

Choose formats and attachments that preserve the agreement's integrity, support recordkeeping requirements, and provide an auditable trail for future review or regulatory inspection.

PDF/A

Save a signed copy as PDF/A to preserve visual fidelity and metadata; this format supports long-term archiving and is compatible with most eDiscovery and records retention solutions.

DOCX

Retain an editable DOCX master before execution to capture version history; convert to PDF after signing to create the official, non-editable record for retention and production.

Audit Trail

Include a certificate of completion showing signer identity, IP address, timestamps, and field-level actions; this supports attribution and evidentiary needs in disputes.

Attachments

Attach schedules, exhibits, and supporting invoices; clearly reference attachments in the main body so exclusions and exclusions' exceptions are unambiguous and retain version-controlled copies for audits.

Practical Drafting and Execution Best Practices

Adopt consistent drafting practices and review checklists to reduce errors and improve enforceability across transactions.

Use precise, itemized exclusion language
List each excluded claim, asset, or obligation separately; include date ranges, identifiers, and any exceptions. Avoid cross-references that are unclear, and ensure descriptions align with definitions elsewhere in the transaction documents.
Confirm authority and corporate power
Obtain and document that the signing officer has authority under corporate bylaws or resolutions; requests for certified board minutes or officer certificates can prevent later challenges to signature validity.
Coordinate related contract provisions consistently
Review warranties, indemnities, and transfer clauses to ensure exclusions do not contradict or undermine other obligations; reconcile any overlap with explicit cross-references and amendment language before execution and legal approval.
Retain originals and secure backups
Store executed originals in a secure records repository, maintain encrypted backups, and preserve audit trails; ensure retention aligns with regulatory and corporate recordkeeping policies for potential litigation or compliance review.

Key Milestones from Drafting to Archival

Key milestones from draft through archival establish responsibility and trigger retention and enforcement timelines clearly.

01

Draft Completion

Document scope finalized and internal approvals obtained

02

Execution

All parties sign and date the agreement

03

Distribution

Executed copies delivered to stakeholders and registries

04

Archival

Store original and electronic copies per retention rules

Dates to Confirm When Preparing an Exclusion

Understand dates and statutory timelines that affect enforcement, filing obligations, and retention for excluded items.

Effective Date and Start of Exclusions:

Enter MM/DD/YYYY; determines when exclusions apply

Signature Completion Deadline, if Applicable:

Complete signatures by stated deadline to avoid disputes

Notarization Timing and RON Rules:

Perform notarization per state law; RON allowed where authorized

Record Retention Start and Trigger Date:

Retention clock starts on execution or termination, per policy

Statute of Limitations and Dispute Periods:

Check state law for applicable limitation periods affecting excluded claims

Core Clauses Every Professional Legal Exclusion Agreement Should Include

A professionally drafted Legal Exclusion Agreement clearly identifies scope, parties, consideration, exceptions, and signatures to support enforceability and post-closing certainty.

Scope

Define exact categories, timeframes, accounts, or assets excluded. Use specific identifiers, serial numbers, contract dates, or legal descriptions to avoid interpretive disputes and ensure exclusions cannot be construed broadly.

Parties

List full legal names and organizational details for each party, including entity type and jurisdiction of formation, to establish who is bound and who benefits from the exclusions.

Consideration

Specify any payment, credit, settlement amounts, or reciprocal promises that support the exclusion; absence of consideration can be challenged under contract law and should be documented with invoices or ledger entries.

Exceptions

Note any exceptions to exclusions, carve-outs, or surviving obligations; define conditions that revive excluded claims or circumstances that fall outside the exclusion, including fraud, willful misconduct, or statutory obligations.

Governing Law

Select the governing state law and venue for disputes; specify that courts will interpret exclusions under that jurisdiction's contract rules and note any exclusive forum clauses.

Execution

Provide signature blocks for all parties, include printed names, titles, and dates; specify whether notarization or witness signatures are required for validity and reference any remote notarization provisions if applicable.

Configure an Online Workflow for Drafting and Signing

Configure an online workflow to route, authenticate, and collect signatures while preserving version history and audit trails.

Workflow Field Configuration and Purpose Table Field | Configuration and routing instructions
Template Template | Use templates to prefill common fields
Conditional Fields Conditional fields | Show/hide based on answers
Authentication Authentication | Email, SMS code, or KBA
Signing Order Signing order | Sequential or parallel routing options

How a Legal Exclusion Agreement Differs from Similar Documents

Quick comparison showing how exclusions differ from releases and related instruments to help you choose the right document form.

Comparison: Document Types and Key Differences Legal Exclusion Agreement Release Agreement
Scope of Effect specific exclusions broad claim release
Consideration Needed often yes yes typically required
Notarization Needed sometimes sometimes
Common Use asset transfers, warranties settlement releases

eSignature Vendor Pricing Snapshot for Executing Agreements

Pricing and feature overview for common eSignature vendors; signNow is listed first per page conventions.

signNow DocuSign Adobe Sign PandaDoc HelloSign
Starting Price $8/user/mo $15/user/mo $14/user/mo $19/user/mo $15/user/mo
Free Trial 7-day free trial Varies by vendor; check provider terms Varies by vendor; check provider terms Varies by vendor; check provider terms Varies by vendor; check provider terms
Bulk Send Yes Yes Yes Yes No
Audit Trail Yes Yes Yes Yes Yes
HIPAA Compliant Yes Yes Yes No No
Envelope Cap No envelope cap 100 envelopes/user/year Varies by plan Varies by plan Varies by plan

Frequently Asked Questions About Legal Exclusion Agreements

Answers to common questions about drafting, signing, and enforcing a Legal Exclusion Agreement, including electronic execution and retention concerns.


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