What Is a Settlement?
A settlement is a legal document in which parties make a promise to complete or abstain from a certain action or activity. Settlements are common in many areas of law.
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Function
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A settlement is a method of ending a legal dispute without having a trial. It outlines what each party in the dispute gives or gets to end the matter.
Types
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Common settlements include divorce, personal injury, damage or civil, and debt.
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Features
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In most settlements, one party offers to pay the other a sum of money in agreement that the other party will not pursue further legal action or attempt to acquire more money in the future.
Process
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A lawyer for one party drafts a settlement proposal and presents it to the other party. If that party agrees to the terms outlined in the settlement, both parties sign the document. If not, negotiations begin or a trial ensues.
Effects
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Once a settlement is signed by a judge, it becomes a court order, with the parties legally obligated to fulfill their parts of the agreement.
Considerations
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Signing a settlement is not an admission of guilt or synonymous with a guilty plea. Often people agree to settlements to avoid the cost and time of a trial.
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