A settlement agreement in a lawsuit or dispute does not need to be a complicated legal document. In fact, a settlement agreement can be a simple contract, provided it accurately sets forth the basic understanding of the parties.
The features of a simple settlement agreement are the names of the parties, an outline of the agreements reached between the parties and signature lines for the parties.
A common misconception is that for a settlement agreement to be binding, it must contain legalese. In fact, the most effective simple settlement agreement is one that uses easily understandable, plain language.
The benefits of a simple settlement agreement include a contract resolving issues in a lawsuit or dispute that both parties understand. In addition, by signing a simple settlement agreement, the parties avoid the time and expense of prolonged litigation.