Sign On The Dotted Line: Boards Of Contract Appeals Issue Cluster Of Recent Decisions Addressing Impact And Scope Of Contractor Releases

• Published date: 23 April 2025
• Subject Matter: Government, Public Sector, Litigation, Mediation & Arbitration, Government Contracts, Procurement & PPP, Trials & Appeals & Compensation
• Law Firm: Arnold & Porter
• Author: Ms Amanda J. Sherwood

Few areas of contract administration are as fraught with potential unintended consequences as the releases so often included in contract modifications and settlement agreements. While releases can provide the clean slate that parties need to resolve past issues and move forward with contract performance, they can also be weaponized in future disputes to bar relief. As discussed in this BRIEFING PAPER, the boards of contract appeals have issued six recent cases helpfully interpreting the scope of releases and providing guidance as to when such releases are dispositive and when extrinsic evidence is required to evaluate their coverage. Combined, these cases highlight the importance of the clarity of the written word: where releases contain clear and unambiguous language, boards will apply them broadly, but language susceptible to multiple interpretations can become mired in battling proffers of extrinsic evidence.

Let It Go Or Save It For Later

Releases come in many sizes and flavors. First, it is important to note that "release and accord and satisfaction are separate contractual defenses," and bilateral contract modifications may qualify as both.¹ The U.S. Court of Appeals for the Federal Circuit distinguishes between the two defenses as follows: (1) in an accord and satisfaction, "a claim is discharged because some performance other than that which was claimed to be due is accepted as full satisfaction of the claim," and (2) "[a] release is a contract whereby a party abandons a claim or relinquishes a right that could be asserted against another."² While many disputes involve both theories, this article focuses on releases.

Second, case law has developed a distinction between general and specific releases. "[A] contractor who executes a general release is thereafter barred from maintaining a suit for damages or for additional compensation under the contract based upon events that occurred prior to the execution of the release."³

There are only "special and limited situations in which a claim may be prosecuted despite the execution of a general release," including: "a mutual mistake where neither party intended to release a certain claim; where the parties' post release conduct indicates that the parties did not intend to abandon the claim; where the inclusion of a claim in a release was an obvious mistake; in situations involving fraud or duress; and when the contracting officer knows that the contractor is asserting a right to additional compensation, even though a formal claim has not been filed."⁴ By contrast, a specific or conditional release only bars certain future claims.⁵

To determine if a general or specific release is at issue, like all matters of contract interpretation, the boards first consider whether the clear language of a release renders its scope clear and unambiguous.⁶ "[I]f the provisions are clear and unambiguous, they must be given their plain and ordinary meaning" without resorting to extrinsic evidence.⁷ However, if a release is neither "unambiguous" nor "iron clad," the tribunal will "allow consideration of the circumstances surrounding the release to determine its meaning."⁸ The emphasis of the interpretation exercise "focus[es] on the intent of the parties at the time the release is executed," as divined from the document itself, "the parties' conduct leading up to the modification," and "the conduct of the parties after a contract modification has been signed."⁹

With that background, let's dive into recent board interpretation of contested releases.

Recent Case Law Addressing Releases

KUNJ Construction Corp.

First, in KUNJ Construction Corp.,¹⁰ the Armed Services Board of Contract Appeals (ASBCA) held that a lack of clarity regarding the intended scope of releases in a series of bilateral modifications precluded summary judgment as to their impact. A contractor holding a firm-fixed-price task order to replace the Central Base Fire System at the Philadelphia Naval Business Center submitted a claim seeking increased costs for alleged Navy-caused delays, ranging from imposition of unnecessarily onerous security requirements, preventing building access, and delaying necessary authorizations. After the contracting officer largely denied the claim, the contractor appealed to the ASBCA, where the parties cross-moved for summary judgment on the Navy's asserted defense of release.

The Navy argued that the following release language in three bilateral modifications barred the contractor's claims:

Acceptance of this modification by the contractor constitutes an accord and satisfaction and represents payment in full for both time and money and for any and all costs, impact effect, and for delays and disruptions arising out of, or incidental to, the work as herein revised.¹¹

The Navy contended that this language either constituted a general release, barring all claims arising prior to each modification, or at least barred claims concerning the subject matter and time periods addressed by the modifications, which the Navy argued encompassed the contractor's claim. The contractor responded that the phrase "work as herein revised" limited the scope of the release to the specific subject matter addressed in the modification, which from the contractor's point of view, differed from the subject matter of its claim.¹²

The ASBCA concluded that the modifications did not qualify as a general release of the contractor's claim, focusing on the plain language of the releases, which did not "clearly and unambiguously embrace all pre-modification claims" so as to evidence a "meeting of the minds" to release unreferenced claims.¹³ Instead, "determining the scope of the claims barred by that clause requires a determination of the parties' intent through examination of the bilateral modification as a whole in the context of the claim at issue and, if necessary, extrinsic evidence."¹⁴

The board analyzed two prior cases interpreting the scope of a release relating to the "work as herein revised," which reached contrary results. In the first, Collazo Contractors, Inc.,¹⁵ the board found that the agreement as a whole did not demonstrate that the parties reached a "meeting of the minds" regarding the "work" to which this language referred, requiring further evidence to determine the scope of the release. By contrast, in the second, Coastal Environmental Group, Inc.,¹⁶ the board found that the surrounding language in the modification made clear that the parties intended for "work as herein revised" to refer to all "work specified in the contract," effecting a general release. Here, the board found that the overall text of the release did not reflect agreement on the meaning of the "work as herein revised," so it could not constitute a general release.¹⁷

After reading the contract modifications as a whole, the board held that language was too ambiguous for the board to grant summary judgment on the issue of whether the releases specifically barred the subject matter of the contractor's current delay claim. While the modifications "do not preclude the possibility that the parties intended to resolve all claims for delay during the extension periods provided by, or the changed work in the secure areas addressed by, the modifications," neither did the modifications expressly state that this was their intent.¹⁸ Rather, "the reasons for the modifications' time extensions are unknown, the connections between the work in the secure areas addressed by the modifications and the claims are not clear, and the releases drafted and inserted by the Navy do not indisputably reveal the parties' intentions."¹⁹ Extrinsic evidence was needed to resolve these factual issues.²⁰

Haskell Co.

The board also found a release insufficiently clear to resolve on summary judgment in Haskell Co.²¹ The contractor and the Navy signed a bilateral contract modification for "Design Phase Changes" to a firm-fixed-price contract to design and build a joint reserve center. The modification included language stating it was "an accord and...