How to Settle a Small Claim Out of Court
If you are facing the prospect of a suit in small claims court, you need to understand your options. You have the legal right to take any small claims suit brought against you to trial. On the other hand, an option to consider is reaching a settlement on issues between you and the other party before a case is filed against you. To intelligently consider a negotiated resolution of a dispute, you need to understand how to settle a small claim out of court.
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Instructions
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Review the contentions made by the other party. Weigh and balance the credibility of what is alleged. Honestly assess your position and that of the other party in regard to the claims.
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Write an initial settlement proposal to the opposition. Leave breathing room in the proposal for additional negotiation. For example, if you think a $1,000 settlement is reasonable, propose $750 in the initial proposal made to the other party.
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Evaluate any counterproposal returned by the other party. You may want to respond to what the other party offers with your own counterproposal. The other party likely will want to reach a settlement. A settlement in most cases is a more efficient and less costly way to resolve a matter.
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Draft a settlement agreement when you reach consensus with the other party on resolving the dispute between you.
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Sign the settlement agreement. Once the other party executes the settlement agreement and you undertake the steps required of you in that contract, the issues between you and the opposition legally are resolved.
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Tips & Warnings
Entering into a settlement agreement is serious business. Therefore, in negotiating the settlement of a small claims dispute you need to be very careful and cautious. You need to fully understand the extent and scope of any agreement you reach with the other party.
