Settlement agreement
Contract Law

Settlement agreements are used to reduce to writing an agreement reached by negotiation, mediation or conciliation. When properly drafted and executed, settlement agreements are binding contracts resolving all disputes between parties or a specific dispute between the parties.

Settlement agreements should deal with several key matters, which include:

1. a release from claims that form the subject matter of the dispute with a view to preventing legal proceedings being brought in the future;
2. waivers of unknown claims where applicable and lawful (confer settlements of employment related disputes);
3. choice of law and jurisdiction clause for disputes under the settlement agreement where there may be doubt as to the law of the contract;
4. a prior assignment of choses in action that relate to the dispute have not previously been assigned or charged to a third party;
5. the terms of settlement; and
6. maintenance of confidentiality in respect to the terms of the settlement agreement other than to professional advisors such as accountants, lawyers and solicitors.