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Crafting a Settlement Agreement That Works for Your Claim or Lawsuit

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So you’ve figured out a way to resolve a breach of contract case or a business law case. That’s generally good news—you’ve avoided the risk and uncertainty of a business law trial. But the job isn’t over—now you need to have some sort of settlement agreement, memorializing what it is that you’ve agreed to. And that can create problems and possibly jeopardize your entire settlement, if not done correctly.

Naming the Entities or Parties

Who are you settling with? Make sure that you name the other side precisely, fully and correctly.

Companies have corporate names, DBA or fictitious names, subsidiaries, and individual corporate officers. If you are trying to bind someone else to a settlement agreement, you’ll want to make sure that you bind any and all corporate entities that are related to the other side.

Penalties for Default

Let’s say you come to an agreement, and the other side doesn’t live up to the agreement. What then? Do you have to start over again in a lawsuit? Does the other side get to assert all of its defenses? That’s kind of like starting over from square one, and that’s not what you want to happen.

That’s why your settlement agreement has to have a provision that says that in the event of a default of the settlement agreement, you have a right to ask the court for a full amount of the damages owed to you, or that there is a waiver of any defenses, or that you have a right to submit a judgment for the full amount owed to you.

This way, if there is a default of the settlement agreement, it’s just a formality to have a judgement in your favor entered.

While you’re doing that, don’t forget post judgment interest and attorneys fees for collecting on your judgment. This way you aren’t out of pocket for post collection activities.

Confidentiality

Confidentiality may be an issue, especially if you are a company that may face other, similar lawsuits. And in addition to adding a confidentiality provision, you may want to also make sure that there is some penalty for violating the confidentiality.

What’s Being Resolved?

Are you settling just the issues or matters related to your current dispute or conflict? Or is it a more global settlement, resolving any claims that may exist, known or unknown, between the parties? That’s important to spell out. You don’t want to be “nickel and dimed” with claim after claim after claim. You can avoid that by making your settlement settle every conflict that may have existed between the parties, even claims that the parties don’t even know exist.

This can avoid you paying a settlement, only to have the other side turn around and make another claim for a similar matter, or even a brand new matter.

Call the West Palm Beach business litigation lawyers at Pike & Lustig today for help resolving your business law claim or lawsuit.

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