Most civil court cases are settled prior to trial. The specific terms of most settlements are embodied in a legally binding contract that specifies the terms and conditions of the parties' agreement. A breach of settlement occurs when one of the parties fails to abide by the stipulations of the settlement agreement.
Function
A settlement agreement is an acknowledgment by both parties to a pending court case that it is in their best interests to settle the matter rather than continue with litigation.
Features
Most settlements in civil cases require that a defendant pay the plaintiff a specified sum of money either in a lump sum or over a period of time. A breach occurs when the defendant fails to promptly pay any sums due under the settlement agreement.
Read More: Definition of a Formal Settlement
Types
Some settlement agreements require one of the parties to perform or to refrain from certain activity. For example, in a trademark infringement case, a settlement agreement might require that the defendant stop using the trademark of the plaintiff.
Significance
Since a settlement agreement is a legally binding contract, the nonbreaching party may file an action in court to enforce the terms of the settlement agreement.
Considerations
Some settlement agreements provide that a nonbreaching party may obtain a judgment against the breaching party in court for either the balance of the money owed or adherence to the terms of the settlement agreement.
Writer Bio
John Barron started freelancing in 2008. Barron writes articles on topics including law, business and finance for various websites. He is an attorney with over 22 years experience in all phases of civil litigation, and corporate and securities law. Barron received a Bachelor of Arts in philosophy and political science from Boston University and a Juris Doctor from Suffolk University Law School.