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A settlement agreement for a commercial dispute between two businesses under a governing law chosen by the parties, with courts or international arbitration: a settlement sum paid in one payment or instalments, full and final settlement with a mutual or one-way release, no admission of liability, confidentiality, ending any proceedings, costs, warranties of authority and no assignment of claims, and acceleration on default.
International / Cross-Border
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This agreement is dated the date on which it is signed by the last of the parties.
This agreement is made between [TO BE CONFIRMED — Party 1 legal name and details] (the "Party 1") and [TO BE CONFIRMED — Party 2 legal name and details] (the "Party 2").
"Dispute" means [TO BE CONFIRMED — Description of the dispute being settled].
"Proceedings" means [TO BE CONFIRMED — Court or arbitration proceedings being ended (forum and case number)].
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"Payment Date" means [TO BE CONFIRMED — Date by which the settlement sum, or the first instalment, must be paid].
"Instalment Schedule" means [TO BE CONFIRMED — Instalment amounts and due dates].
"Payment Account" means [TO BE CONFIRMED — Receiving Party's bank account for payment].
"Withdrawal Period" means 7 days after the Receiving Party receives the Settlement Sum in full.
"Grace Period" means 7 days.
"Default Interest Rate" means [TO BE CONFIRMED — Interest rate on late payments].
"Costs Contribution" means [TO BE CONFIRMED — Contribution to the Receiving Party's legal costs].
"Excluded Claims" means [TO BE CONFIRMED — Specific claims that are NOT settled].
"Agreed Statement" means [TO BE CONFIRMED — Agreed statement about the settlement].
"Governing Law" means the law of [TO BE CONFIRMED — Governing law (country or state)].
"Agreed Courts" means the courts of [TO BE CONFIRMED — Courts that hear disputes about this agreement].
"Arbitration Rules" means [TO BE CONFIRMED — Arbitration rules (where disputes go to arbitration)].
"Seat" means [TO BE CONFIRMED — Seat (legal place) of arbitration].
Where a party is an individual, "it" and "its" include him or her, and "his" and "her"; a reference to a party's power and authority includes his or her legal capacity; a reference to a party's directors, officers or senior managers applies only to a party that is a body corporate or other entity; and an individual party may sign this agreement personally.
The Dispute has arisen between the parties, and the claims made in connection with it are contested.
The Dispute is the subject of the Proceedings.
The parties have agreed to settle the Dispute on the terms of this agreement, to avoid the cost, time and uncertainty of continuing it, and without any admission of liability.
The Party 1 (the "Paying Party") must pay the Settlement Sum to the Party 2 (the "Receiving Party") in accordance with this Settlement Payment clause.
The Paying Party must pay the Settlement Sum in full, in a single payment, no later than the Payment Date.
Each payment must be made in cleared funds by bank transfer to the Payment Account, without any set-off, counterclaim, deduction or withholding except as required by law. A payment is made when the funds are received in the Payment Account. The Receiving Party must confirm receipt in writing promptly on request.
A party is not required to make or accept a payment under this agreement if doing so would breach a sanctions, anti-money-laundering or export control law that applies to it, and in that case the payment date is extended until the payment can lawfully be made. The party affected must tell the other promptly, without disclosing information it is not allowed to disclose, and the parties will co-operate to find a lawful way to pay, such as a different bank or account. No interest is payable for a delay caused in this way.
The Settlement Sum is inclusive of any value added or similar tax that may be chargeable on it. Each party is responsible for its own tax treatment of any amount it pays or receives under this agreement. If the law requires the Paying Party to withhold tax from a payment, it must give the Receiving Party evidence of the withholding and payment to the tax authority.
Each party bears its own legal and other costs in connection with the Dispute, any proceedings about it, and the negotiation and performance of this agreement.
The terms of this agreement are in full and final settlement of the Settled Claims.
"Settled Claims" means all claims, demands, rights of action and liabilities of any kind, whether known or unknown, actual or contingent, present or future, and however arising, including in contract, tort or under statute, that arise out of or in connection with the Dispute, any proceedings about it, or the facts and matters giving rise to it, including any claim for interest or costs, but excluding the Excluded Matters.
"Released Persons" means, in relation to a party, that party, its affiliates, and its and their current and former directors, officers, employees and agents; and a party's affiliates are the persons that control it, are controlled by it or are under common control with it.
"Excluded Matters" means claims to enforce this agreement; any claim arising from fraud, fraudulent misrepresentation or dishonest concealment of which the party giving the release is unaware on the date of this agreement; and any claim that cannot lawfully be released.
The Excluded Claims are also Excluded Matters, and nothing in this agreement releases or affects them.
With effect from the date on which the Receiving Party receives the Settlement Sum in full, each party, in respect of its own claims only, releases and forever discharges each of the other party's Released Persons from all Settled Claims.
Each party that gives a release under this clause must not, and must procure that its affiliates do not, start, continue or voluntarily assist in any proceedings against a Released Person of the other party in respect of a Settled Claim, except as required by law.
Each party that gives a release under this clause acknowledges that it may later discover facts or claims in addition to or different from those it now knows or believes to exist, and intends the release to apply to Settled Claims of which it is unaware on the date of this agreement, subject only to the Excluded Matters.
To the extent the law permits, each Released Person who is not a party may enforce the release and this clause, but the parties may vary or end this agreement without the consent of any such person.
This agreement is a compromise of disputed claims. Nothing in it, and nothing done under it, is an admission of liability or wrongdoing by any party, and neither party may rely on it as evidence of liability, except in proceedings to enforce it.
Within the Withdrawal Period, the parties must take every step required under the rules of the court or tribunal hearing the Proceedings to withdraw, discontinue or dismiss the Proceedings, including any counterclaim, with prejudice where that is available, and with no order as to costs.
Until the Proceedings have ended, the parties must not take any further step in them except to ask the court or tribunal to stay them, extend time or vacate any hearing so as to give effect to this agreement, and must make any such request jointly where needed.
The discussions that produced this agreement were held in confidence and without prejudice, and are privileged against disclosure so far as the law of the court or tribunal concerned recognises that protection. The signed agreement is not covered by that protection: it binds the parties, and either may put it before any court, tribunal or authority to enforce it or to prove that the Dispute is settled.
Each party must keep the terms of this agreement, and the negotiations that led to it, confidential, and must not disclose them except to its affiliates, professional advisers, auditors, insurers and financiers who need to know them and are bound to keep them confidential; as required by law, a court, a regulator or the rules of a stock exchange; to a tax authority; to enforce this agreement; or with the other party's written consent. Either party may say that the Dispute has been resolved to the parties' mutual satisfaction.
Either party may make the Agreed Statement in response to an enquiry about the Dispute. Neither party may make any other public statement about the Dispute or its settlement without the other party's written consent, and this takes priority over any statement the Confidentiality clause would otherwise permit.
Each party must not make, and must take reasonable steps to ensure that its directors and senior managers do not make, any statement to a third party that is intended or reasonably likely to disparage the other party or its Released Persons in connection with the Dispute. This does not restrict any disclosure permitted by the Confidentiality clause, any statement required by law or made in legal proceedings, or any report to a regulator or law enforcement authority.
Each party warrants to the other that it has full power and authority to enter into and perform this agreement, that it has obtained every consent and approval it needs to do so, and that the person signing on its behalf is authorised to do so.
Each party warrants to the other that it has not sold, assigned, transferred, charged or otherwise disposed of any Settled Claim it releases, or any interest in one, and that, so far as it is aware, no other person is entitled to bring such a claim in its name or on its behalf.
Each party warrants to the other that, apart from any proceedings referred to in this agreement, neither it nor, so far as it is aware, any of its affiliates has started any proceedings against a Released Person of the other party in respect of a Settled Claim.
Each party confirms that it has had the opportunity to take independent legal advice on the terms and effect of this agreement, and that it enters into it freely.
If the Paying Party does not pay any amount due under this agreement in full within the Grace Period after its due date, the Receiving Party may by written notice declare the whole unpaid balance of the Settlement Sum immediately due, and the Paying Party must pay it immediately. The Receiving Party may then recover the unpaid balance as a debt, together with its reasonable costs of recovery. The Receiving Party's remedy for non-payment is to enforce this agreement, and it may not pursue the Settled Claims themselves.
An overdue amount accrues interest at the Default Interest Rate from the day after its due date until payment, including after judgment or award. If the law governing this agreement or the law of the Paying Party's place of establishment restricts interest on commercial debts or caps the rate, the rate is reduced to the highest permitted figure.
A notice given under this agreement must be in English and sent to the Party 1 at [TO BE CONFIRMED — Party 1 notice address and email] or to the Party 2 at [TO BE CONFIRMED — Party 2 notice address and email], by hand, internationally recognised courier or email, or to a replacement address notified under this clause. It is given on delivery by hand or courier; an email is given when sent unless a delivery failure message is returned. Business hours and working days are those of the place where the recipient's address is. Rules of court or of the arbitral tribunal, not this clause, govern service of procedural documents.
This agreement is the whole agreement of the parties about settling the Dispute. It supersedes all earlier discussions, drafts and arrangements on that subject, and a party has not relied on any promise or statement made outside it. Liability for fraud is not excluded.
Each party must, at its own cost, sign any document and do anything else reasonably required to give full effect to this agreement.
This agreement is made in English, and the English text controls. If a party has it translated for a court, authority or bank, the translation is only for convenience, and the translating party must pay for it and for any legalisation or apostille the receiving body requires.
Rights under this agreement cannot be assigned without the other party's written consent. A change to this agreement is binding only in a document signed by both parties, and a waiver only in a signed writing for the case it addresses. An unenforceable provision is severed in the country concerned and the rest remains valid. Third parties have no right to enforce this agreement, except the Released Persons as the Settlement and Release clause provides or as mandatory law gives them. The parties may sign in counterparts and by electronic means recognised where the signatory is located.
The Governing Law applies to the formation, meaning, performance and enforcement of this agreement and to every non-contractual claim connected with it. Disputes arising from this agreement are for the Agreed Courts alone. Each party submits to their jurisdiction and waives any objection that the forum is inconvenient. A party may still ask a court elsewhere for interim measures, and may take a judgment of the Agreed Courts to any country where the other party has assets.
The parties intend any award made under this agreement, and any judgment of the Agreed Courts, to be recognised and enforced internationally. Each party agrees to take the steps and to sign the documents needed for that purpose, and the party seeking enforcement may add its reasonable costs of enforcing in another country, including translation and legalisation, to its claim. Each party confirms that the Seat, if arbitration is chosen, is in a country that is party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards.
A party that has or may claim immunity from suit, enforcement or other process in any country waives it to the extent the law allows, and agrees that this agreement is a commercial transaction. A party not established in the country of the Agreed Courts or of the Seat must appoint, and keep in place until its obligations under this agreement end, an agent there to accept service of documents, and must notify the other party of the agent's details.