settlement approval
Definition
Settlement approval is when a judge officially reviews and signs off on an agreement that two sides have reached to resolve a lawsuit without going to trial. Courts require this step in certain cases to make sure the deal is fair, especially when the agreement affects a group of people or involves someone who cannot fully protect their own interests, like a minor. Once a judge approves the settlement, it becomes legally binding and neither side can back out.
Example
If your business settles a class action lawsuit brought by multiple customers, a judge must review the terms to confirm the deal treats everyone fairly before it takes effect. Without that approval, the settlement has no legal force.
Watch Out
If you reach a settlement in a case that requires court approval, do not treat the deal as final or take any action based on it until the judge has actually signed off.
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.