Written Settlement Agreement
If you are a defendant who chooses to settle with an opponent, or represent such a defendant, as opposed to going to court, you need to enter into a written settlement agreement with the plaintiff. A settlement agreement formalizes that settlement and prevents the plaintiff from suing again.
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Fault
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Most defendants insist on including a clause stating they are not admitting fault with respect to the incident that triggered the lawsuit. Nevertheless, there is no legal requirement for such a clause and no adverse legal consequences for failing to include it, as long as the agreement includes a release clause.
Payment
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The total amount of the payment should be listed, and if payments are to be made over time, the dates of each installment should be listed. The method of payment should also be included --- by bank transfer to a particular bank account, for example. If non-cash compensation is included, describe it and specify the means of delivery, even if it is something intangible such as a public apology.
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Mutual Release
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The release clause is the most important part of the agreement from the defendant's point of view, because it prevents the plaintiff from suing the defendant again on the same matter. For example, if the settlement arises from injuries sustained in an auto accident, the release clause prevents the plaintiff from suing the defendant again if he discovers that his injuries are more serious than he originally thought. The plaintiff will almost certainly insist on conditioning the release on full and timely payment of the settlement. He is also likely to insist that the release clause be mutual, to release the plaintiff from any counterclaims by the defendant.
Confidentiality
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Public disclosure of the settlement, or of the negotiations that led to it, might embarrass the defendant, and in a commercial contest might lead to the public disclosure of proprietary information. Include a confidentiality clause that prevents either party from disclosing the negotiations leading up to the settlement, the contents of the settlement and perhaps even the matter that led to the dispute and the existence of a settlement.
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References
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