How to Prepare a Full & Final Settlement

Full and final settlements must be worded to avoid ambiguity and vagueness.
••• signing a contract image by William Berry from

Litigation is costly. Attorney fees alone easily reach tens of thousands of dollars in some cases. Attorneys and litigants representing themselves owe a duty not to waste time and money. If a settlement is possible and favorable to both parties in light of costs and time, the parties should agree to one. Wording the settlement requires careful thought and attention. The purpose, after all, is to avoid future litigation.

Step 1

Identify the parties and the date they reached a settlement. Write “On [date], [Party A] and [Party B] agreed to a settlement for [lawsuit docket number]. The agreement is as follows.” You can find the docket number on the original complaint initiating the lawsuit or by calling the court clerk.

Step 2

State that the settlement is full and final. List the amount. Write “The full and final settlement amount is [dollar amount].”

Step 3

Specify who is to pay the amount and how the amount is to be paid. For example, if the settlement is to be paid by Party B in one lump sum, write: “[Party B] agrees to tender a lump sum of [settlement amount] via [cash, check or money order] to [Party A] on [date].”

Step 4

List any terms and conditions agreed in addition to the settlement amount. If the parties agreed to keep the settlement confidential, for example, list those conditions in the final section.

Step 5

Print draft copies of the settlement and have each party proofread it and make corrections as necessary. Provide final copies to each party to sign. Signing in once place in the presence of a notary public is recommended to prevent the agreement from being disputed on the grounds of identity later.


  • Use clear and simple language when drafting the agreement. The language must leave nothing to interpretation.

Related Articles