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In communication between parties to a dispute, the phrase we reserve our client's rights is often included. I've only ever seen this used by solicitors acting for a client in a matter, but I would imagine that it would have the same effect if used by one of the parties.

What is the purpose and legal effect of including this statement, and what are the consequences of not including it?

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It is done to prevent or at least provide a defence against a latter argument based on Estoppel; which at the risk of trivialising something that is very complex means that if you indicate to someone that you will or won't do something and they act on that indication then they may have a claim if you don't do what you indicated.

When lawyers say this they are usually outlining a client's possible future actions so estoppel is in play. If they include this they are specifically saying "... But we might not do that."

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    Even more so than "estoppel" it is guarding against the claim that a communication constitutes a "waiver" of a right to object to something or to take some course of action, because the allegedly waived right or objectionable circumstance wasn't mentioned or exercised at a time when there was a known dispute between the parties.
    – ohwilleke
    Commented Mar 10, 2017 at 17:45

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