This section is from the book "The Law Of Contracts", by William Herbert Page. Also available from Amazon: Commercial Contracts: A Practical Guide to Deals, Contracts, Agreements and Promises.
A release, like any other con-tract,1 may be granted to take effect upon the happening of some condition precedent.2 Until the happening of such condition, the release is inoperative; and upon the happening of such condition, it becomes absolute.
Whether a release can be granted to take effect at once, subject to being defeated by the happening of a condition subsequent, so that the original cause of action would then revive, is a question upon which there has been considerable discussion and comparatively little direct authority. It was repeatedly declared that at common law, if the cause of action was once barred by the voluntary act of the parties, it was always barred; 3 and this principle was invoked as the ground for holding that a covenant not to sue for a limited time could not be pleaded as a bar to an action upon the original cause of action, before the expiration of such period of time.4 At the same time the rule itself seems arbitrary and possibly is stated too broadly. Since conditions subsequent were permitted in other contracts or in conveyances of realty, no reason appears for denying their existence in releases. Even if the releasee might plead such conditional release and obtain a judgment in his favor, such judgment ought not to be a bar to a subsequent action on the original cause of action, after new facts had arisen, which prevented the release from operating as a bar; although it might be that the form of judgment and rigidity of common-law theories as to the nature and effect of a judgment as an estoppel of record, would make it operate in defiance of the intention of the parties. In any event, language has been used which tends to indicate that the courts regarded a release upon a condition subsequent as possible.5