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A settlement agreement is a binding contract between two or more parties after negotiations but before final judgment in resolving a dispute.
The agreement expresses mutual agreement for an outcome to be approved by a judge. Before signatures, however, you must first draft a settlement agreement to review with the associated parties.
Drafting a settlement agreement requires writing an offer to resolve conflict or dispute, including terms and conditions both parties must agree to follow. Each state has its laws regarding settlements, so it is important to have a professional attorney review yours before submitting it to the court.
The attorney you choose should be licensed to practice law in your state and have comprehensive knowledge of the settlement agreement process.
Here is an article with more information about settlement agreements, how they work, and why they’re beneficial.
The best way to draft a settlement agreement is to work with an attorney who can provide a well-written legal document. You can, however, also look for settlement agreement templates online and modify one to suit your situation.
Remember that there are often legal requirements for settlement agreements, which will differ by situation and state. For example, the settlement agreement for parents in a custody dispute over their children will have different requirements than an agreement between two businesses.
It’s important to understand the agreement's requirements and logistics before signing. If the terms are unclear, it’s best to enlist the help of an experienced attorney who can answer any questions you may have.
Before drafting a settlement agreement, you may consider meeting with the other parties and a mediator. A mediated settlement agreement can help avoid further disputes and reach mutually agreed-upon terms more quickly.
Mediators can also help both parties agree upon facts and avoid emotional biases or unnecessary judgments. In cases where only one party is to blame, the mediator may be able to help them settle by taking accountability and making amends in exchange for the other party not pursuing further legal action. Mediators are often utilized in divorce cases when neither party can come to an amicable agreement.
The most important part of drafting a settlement agreement is mutual agreement on past events and present circumstances. It can be helpful to start negotiations by acknowledging that both parties want to reach a peaceful resolution, and settlement is the ideal way to do so.
Here is an article with a detailed sample settlement agreement that explains different elements.