A settlement agreement is a legally binding contract that helps resolve a dispute without going to trial. It is commonly used in civil litigation and includes mutually agreed-upon terms, such as compensation or actions to be taken.
The agreement clearly identifies the parties involved, such as the plaintiff and defendant, and begins with a brief description of the dispute and the reason for settling. It also outlines specific actions like payments and timelines.
A key feature of a settlement agreement is the release of claims, where the plaintiff agrees not to pursue further legal action related to the dispute. This often includes provisions that prevent any future claims, even if conditions worsen for the plaintiff.
Essentially, the plaintiff waives their right to bring new legal claims, even for unforeseen issues that may arise after the settlement. The agreement also details how it will be enforced, specifying consequences for non-compliance. If a party does not uphold the terms of the settlement, the other party can seek enforcement through the court, and a breach may result in additional payments.
Many settlement agreements include a confidentiality clause to protect the parties’ reputations, ensuring that the terms of the settlement remain private.
Finally, settlement agreements are often stated to be “final and binding,” meaning both parties agree that the settlement conclusively resolves the dispute and that they will not seek further legal action in the future.
To enforce a settlement agreement , the party seeking enforcement may file a motion with the court that had jurisdiction over the dispute or file a breach of contract claim in the appropriate court if the agreement was breached. If the settlement agreement is court-approved, the court may enforce its terms just like any other court judgment. If a party fails to comply with the settlement’s terms, the other party can request the court to issue an order enforcing the agreement .
Courts typically favor settlement agreements and will enforce them if they are clear , valid , and voluntarily entered into by both parties.
