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.
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.
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.
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.
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.