No one can be trusted these days with their words. Most of the people tend to fall back on their promises. Some even try to make changes to already made agreements for their benefit. Given all this, a settlement agreement is necessary and warranted.
The legal framework is more complex than anything else in the world. In light of that, one always needs to know a proper settlement agreement format. But the question is, why would anyone need it unless required? You will find out the answer by reading the following sections.
What Is a Settlement Agreement?
A settlement agreement ensures the resolution of a dispute between two or more parties. The task of the settlement agreement is not to bring about an end to the argument but to document the conclusion and the conditions about it.
In case of preparing a settlement agreement, all the parties put down their signatures against the points to which they have agreed.
The nature and essence of a settlement agreement are that all parties respect it after it has been drawn to avoid further conflicts in the near or distant future. Thus a settlement agreement does not only put an end to present conflicts but also conflicts that might happen in the future.
Often settlement agreements are stroked between employers and employees when the employer fails to adhere to labor laws. In that case, the employer agrees with the employee to avoid tedious court proceedings that might be expensive and take up a lot of time.
Who Needs a Settlement Agreement?
The basis of a settlement agreement between two parties or individuals is that one of them does not wish to take it to court. Court proceedings usually take a lot of time, and there’s also a great number of court fees and the lawyer’s bill needed to pay.
While such conveniences have given rise to settlement agreements, nevertheless, drawing up a proper settlement agreement is ambiguous. Settlement agreements can take place in any two individuals to put an end to their conflict.
Settlement agreements can be set between two entrepreneurs who are in dispute with each other over a business plan that both of them claim to be their intellectual property.
What Are Included in a Settlement Agreement?
A proper settlement agreement includes all the relevant details that have led to the settlement agreement being drawn in the first place.
This might consist of the initial steps that were taken, the charges that might have been instituted, and the allegations that might have cropped up on the part of either the individuals or concerned parties.
- Dismissal of Pending Litigation: The plaintiff should agree to dismissal of any claim from the given date.
- Release of Future Claims: Plaintiff releases the defender from further claim, waives any rights that arise out of pending litigation. Both the parties agree that the general release should not extend as per any claims which either of the parties do not recognize.
- Settlement Amount: The defendant is obligated to pay the plaintiff the decided amount at the completion of release and given settlement. Payment should be paid in full amount.
- Time: The time frame should be adhered to.
- No Modification Unless in Writing: All necessary changes should be informed and made in written format.
- Further Assurances: If any, it should be stated under this clause.
- Venue: Both parties shall mutually agree to all the conditions stated in the agreement.
Both the parties also forgo the option of taking it up in the near or distant future and agree not to make any further claims with regards to the matter. This is followed by the amount of money that either of the party is necessitated to disburse
About this, the concerned party promises to make the transactions within the agreed timeframe.
Settlement agreements recently turn into a necessity, and most people will need it with the number of people breaking their promises at the passing of every hour.
Since most people won’t be able to afford a lawyer or take the help of a public attorney, having a settlement agreement is the best solution to dispute resolution outside court without wasting time and energy.
If you are looking for settlement agreement templates, you can visit the official website of CocoSign. We provide excellent templates and formats for all kinds of agreements.