Legal Dictionary of Pakistan

covenant not to sue

A covenant in which a party having a right of action agrees not to assert that right in litigation. - Also termed contract not to sue. "A covenant not to sue is a promise by the creditor not to sue either permanently or for a limited period. If the promise is one never to sue it operates as a discharge just as does a release. The theory is that should the creditor sue despite his promise not to, the debtor has a counterclaim for damages for breach of the creditor's covenant not to sue which is equal to and cancels the original claim .... If the covenant is not to sue for a limited time, the modern view is that the covenant may be raised as an affirmative defense to any action brought in violation of the covenant." John D. Calamari & Joseph M. Perillo, The Law of Contracts § 21-11, 878-79 (3d ed. 1987).