A settlement agreement ends a business dispute for good. Here's when to use one and what it needs to include.
A Commercial Settlement Agreement is a legally binding document that resolves a business dispute without going to court. Once signed, it prevents either party from reopening the matter. It is one of the most practical tools in commercial dispute resolution.
A settlement agreement is appropriate when both parties want to resolve a dispute without litigation -- whether the dispute relates to unpaid invoices, defective work, breach of contract, or any other commercial disagreement. It is also used when court proceedings have already been issued and the parties reach an out-of-court settlement. The key is that both parties must agree. A settlement agreement is a mutual document -- you cannot impose one on someone who does not consent.
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