48 CFR § 49.109-2 - 49.109-2 Reservations.

---
identifier: "/us/cfr/t48/s49.109-2"
source: "ecfr"
legal_status: "authoritative_unofficial"
title: "48 CFR § 49.109-2 - 49.109-2   Reservations."
title_number: 48
title_name: "Federal Acquisition Regulations System"
section_number: "49.109-2"
section_name: "49.109-2   Reservations."
chapter_number: 1
chapter_name: "FEDERAL ACQUISITION REGULATION"
subchapter_number: "G"
subchapter_name: "CONTRACT MANAGEMENT"
part_number: "49"
part_name: "TERMINATION OF CONTRACTS"
positive_law: false
currency: "2026-03-24"
last_updated: "2026-03-24"
format_version: "1.1.0"
generator: "[email protected]"
authority: "40 U.S.C. 121(c); 10 U.S.C. chapter 4 and 10 U.S.C. chapter 137 legacy provisions (see 10 U.S.C. 3016); and 51 U.S.C. 20113."
regulatory_source: "48 FR 42447, Sept. 19, 1983, unless otherwise noted."
cfr_part: "49"
---


# 49.109-2 49.109-2   Reservations.

(a) The TCO shall—

(1) Reserve in the settlement agreement any rights or demands of the parties that are excepted from the settlement;

(2) Ensure that the wording of the reservation does not create any rights for the parties beyond those in existence before execution of the settlement agreement;

(3) Mark each applicable settlement agreement with “This settlement agreement contains a reservation” and retain the contract file until the reservation is removed;

(4) Ensure that sufficient funds are retained to cover complete settlement of the reserved items; and

(5) At the appropriate time, prepare a separate settlement of reserved items and include it in a separate settlement agreement.

(b) A recommended format for settlement of reservations appears in 49.603-9.