settlement
Definition
A settlement is an agreement where two parties in a dispute resolve their conflict outside of court, usually with one side paying money or making some other concession to the other. Both sides agree to end the legal fight, and in exchange, the person receiving compensation typically agrees to drop all future claims related to the issue.
Example
If a customer slips and falls in your store and threatens to sue you, you might agree to pay them $10,000 to cover their medical bills, and they sign an agreement promising never to take you to court over that incident.
Watch Out
Always have a lawyer review a settlement agreement before you sign it, because the document will almost certainly prevent you from going back to court even if you later discover additional damages or problems you did not know about at the time.
See which terms appear in your contract?
This definition is for informational purposes only and does not constitute legal advice. Please consult with a licensed attorney for legal guidance.