Settlement & Release Agreement

A settlement and release agreement can end or prevent a lawsuit.
••• gavel image by Cora Reed from

A settlement and release is a contract that brings the parties to agreement on the outcome of a dispute, settling the plaintiff's claims and releasing the defendant from future claims arising from the same transaction or occurrence. It can prevent or end a lawsuit.

Payment for Plaintiff

To reach an agreement, both parties must give up something. The defendant or potential defendant gives the plaintiff the relief he wants--or at least a compromise of the plaintiff's demands. The relief the defendant offers may be the result of weeks, months or even years of negotiation. The benefit to the plaintiff is known as the settlement.

Release for Defendant

The parties must also compromise to meet the needs of the defendant. This is usually in the form of a release incorporated into the settlement agreement. The plaintiff, in exchange for the defendant addressing his injury, agrees to release the defendant from the current claim, usually without identifying fault, and also releases the defendant from any possibility of future claims.

Read More: What Is a Release of Liability?

Court Enforcement

Like any contract, a settlement agreement and release can be enforced by a court. The party who breaches the settlement and release can be taken to court, and a judge may order performance of the contract.

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