A settlement agreement is a binding contract that helps settle a lawsuit between two or more parties. It stipulates that no lawsuit can be filed afterwards and is typically the method that courts prefer. There are two main types of settlements- mutual and unilateral. Further, a settlement agreement serves and releases each party (or one party) from any claims that may arise from the incident in the present and future. A settlement agreement should be altered to specifically state that the said parties are released. Heirs, executors, and assignees can also be released through a settlement agreement, whether it be mutual or unilateral. For instance, if a man has heirs, like his children, they can potentially be released as well to avoid becoming liable for any debts owed by their father.

A mutual settlement agreement is where each party releases the other from the lawsuit and is the most common of the chosen two agreements due to the level of protection it offers each party from litigation in the future. 

A unilateral settlement agreement is where only one party is released from the lawsuit and are typically common in unfair labor disputes. Since both parties are not release, it is a possibility that the other party could face potential legal issues in the future.

Whether it be a mutual agreement or a unilateral agreement, both should include the following:

• Full names of the parties joining and signing the release
• Specifics about the incident that brought the conflict
• The title of the lawsuit if a lawsuit is pending
• The consideration
• Indication of what the release is freeing each party from

The consideration is the monetary amount of the settlement and anything additional that each party agrees to. Overall, the consideration is what will end the dispute. 

Specifically in a unilateral settlement agreement, nobody is admitting liability. Furthermore, a settlement agreement bypasses an admission of liability and is simply brought forth to end a dispute regardless of who may be at fault. A settlement agreement should always be in writing and contain signatures of all parties.

If you feel that a settlement agreement is right for you, please contact our firm for a free consultation. The attorneys at Wilson Whitaker Rynell are here to guide you through the process.  Our firm assists in preparing and drafting settlement agreements.