Settlement Agreement and Release

End a dispute, a claim or a lawsuit on agreed terms: one side pays, both sides release each other, and nobody admits fault. Fill in the dispute and the payment, send one link, and the other side signs.

A settlement agreement and release ends a dispute between two parties. One pays an agreed sum, each releases the other from all claims arising from the dispute, neither admits liability, and any pending lawsuit is dismissed. Both parties sign.

Sign in to use this template · Set the few terms only you can, reword anything, and send it to be filled in and signed. The people you send to never need an account.

What it covers

When to use it

What it does not do

Signing, witnesses and delivery

The agreement

Settlement Agreement and Release of Claims

This Settlement Agreement and Release (the "Agreement") is made between [Claimant name (person or company)], of [Claimant address] ("Claimant"), and [Paying party name (person or company)], of [Paying party address] ("Respondent"). A dispute has arisen between them, described as follows: [Describe the dispute] (the "Dispute"). Lawsuit status: [Lawsuit status]. Any such lawsuit is identified as [Case name, court and case number (or "None")] (the "Action"). The Parties wish to resolve the Dispute and every claim arising from it fully and finally, without any admission of liability, on the terms below. Claimant and Respondent are each a "Party" and together the "Parties".

1. Settlement Payment

In consideration of the releases and promises in this Agreement, Respondent shall pay Claimant the total sum of [Settlement payment] (the "Settlement Payment"). Payment terms: [Payment terms]. The Settlement Payment, or its first installment, is due on or before [Payment deadline (or first installment due)]. If paid in installments, the schedule is: [Installment schedule (or "Not applicable")]. Payment shall be made by [How payment is made], or as Claimant otherwise directs in writing.

The Settlement Payment is the entire amount Respondent will pay in connection with the Dispute. Each Party bears its own attorney fees and costs and any tax consequences of the Settlement Payment to it; neither Party has given the other tax advice.

2. Release by Claimant

Effective on receipt of the Settlement Payment in full (or, if paid in installments, on receipt of the first installment and subject to Section 10), Claimant, for itself and its heirs, spouse, agents, successors and assigns, releases and forever discharges Respondent and its owners, officers, employees, agents, insurers, affiliates, successors and assigns (the "Respondent Released Parties") from any and all claims, demands, causes of action, damages, liabilities, debts, costs and expenses of every kind, whether known or unknown, suspected or unsuspected, in law or in equity, that Claimant now has or may later have against any of them arising out of or relating in any way to the Dispute, the Action, or the facts and events underlying them, through the date Claimant signs this Agreement (the "Released Claims").

3. Release by Respondent

Scope of the release: [Release]. If mutual, then on the same effective date Respondent, for itself and its owners, agents, successors and assigns, releases and forever discharges Claimant and its heirs, agents, insurers, successors and assigns (the "Claimant Released Parties") from any and all claims of every kind, whether known or unknown, arising out of or relating in any way to the Dispute, the Action, or the facts underlying them, through the date Respondent signs this Agreement, and those claims are also "Released Claims". If one-way, Respondent gives no release under this Section but every other term applies to both Parties. Nothing in this Agreement releases any Party’s obligations under this Agreement itself.

4. Waiver of Unknown Claims (Civil Code §1542)

Each releasing Party acknowledges that it may later discover facts or claims in addition to or different from those it now knows or believes to be true with respect to the Dispute, and agrees that the releases in this Agreement extend to all such claims, and shall remain in full effect notwithstanding the discovery of any such fact or claim. Each releasing Party expressly waives and relinquishes every right and benefit it may have under Section 1542 of the California Civil Code, and under any similar law of any other state or jurisdiction, to the fullest extent it may lawfully do so. Section 1542 reads: "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY."

Each Party has read Section 1542, understands it, and has had the opportunity to ask a lawyer about its effect. The Parties initial this Section to confirm that waiver.

5. Dismissal of the Action

If an Action is pending, Claimant shall, within [Days after payment to file dismissal (or 0 if no case)] days after receiving the Settlement Payment (or its first installment), file a dismissal of the Action with prejudice as to all parties and claims, each party to bear its own costs and attorney fees, and both Parties shall promptly sign any stipulation the court requires. If Claimant fails to do so, Respondent may file this Agreement with the court, Claimant consents to entry of the dismissal on that basis, and Claimant shall pay Respondent’s reasonable costs of obtaining it. If no Action is pending, Claimant covenants not to file any action asserting a Released Claim.

6. No Admission of Liability

This Agreement is a compromise of disputed claims. Nothing in it, and no payment under it, is an admission by any Party of any liability, fault or wrongdoing, all of which each Party denies. It shall not be offered in evidence in any proceeding as an admission, except one to enforce or interpret it.

7. Confidentiality

Confidentiality: [Confidentiality]. If the terms are confidential, neither Party shall disclose the amount or terms of this Agreement, or the negotiations leading to it, to anyone other than its lawyers, accountants, tax advisors, insurers, lenders and immediate family members or, for an entity, its owners and officers, each of whom shall be told to keep the information confidential; as required by law, subpoena or court order, after notice to the other Party where lawful; or as needed to enforce this Agreement. If asked, a Party may say only that the Dispute has been resolved. Nothing in this Section prevents any person from reporting possible violations of law to a government agency, from testifying truthfully when compelled, or from disclosing facts that applicable law makes non-confidential. If the terms are not confidential, this Section does not apply.

8. Representations

Each Party represents to the other that: (a) it has not sold, assigned, pledged or otherwise transferred any Released Claim or any interest in one, and no other person has a right to assert any Released Claim on its behalf; (b) it has full authority to enter into this Agreement and, if an entity, the person signing has been duly authorized; (c) it has read this Agreement in full, understands it, and signs it voluntarily without relying on any promise or representation not contained in it; and (d) it has had the opportunity to consult a lawyer of its choice before signing. Each Party shall indemnify the other against any Released Claim asserted by a person claiming through it in breach of paragraph (a).

9. Non-Disparagement; Cooperation

Neither Party shall make any false or disparaging statement about the other concerning the Dispute to any third party, in person or online, and each shall remove or request removal of any review or post it has made about the other concerning the Dispute within ten (10) days after the Settlement Payment is received. Each Party shall sign any further document reasonably needed to carry out this Agreement, including any lien release, satisfaction of judgment or notice to an insurer.

10. Default in Payment

If Respondent fails to make the Settlement Payment or any installment within ten (10) days after written notice from Claimant that it is overdue, then, at Claimant’s election by written notice, the entire unpaid balance becomes immediately due with interest at ten percent (10%) per year from the original due date, or the maximum lawful rate if less; Claimant may sue on this Agreement for that balance even if the Action has been dismissed; and Respondent shall pay Claimant’s reasonable attorney fees and costs of collection. The releases given by Claimant remain effective as to the Dispute but do not release Respondent’s obligation to pay under this Agreement.

11. General

This Agreement is governed by the laws of the State of [Governing law (state)], without regard to its conflict-of-laws rules. The prevailing Party in any action to enforce or interpret it is entitled to reasonable attorney fees and costs. This Agreement is the entire agreement between the Parties about the Dispute and supersedes all prior negotiations, offers and writings. It may be amended only in a writing signed by both Parties. If any provision is held invalid or unenforceable, it shall be enforced to the fullest extent permitted and the remainder remains in effect. It binds and benefits the Parties and their heirs, successors and assigns, and the Released Parties are intended third-party beneficiaries of the releases.

12. Electronic Signatures; Counterparts

This Agreement may be signed electronically and in counterparts, each of which is an original, and is effective when both Parties have signed. The electronic execution record, timestamps and document fingerprints kept by the signing platform are conclusive evidence of execution. Each person signing represents that they are authorized to bind the Party for whom they sign.

Signatures

Paying party (Respondent) · Claimant

Settlement Agreement and Release FAQ

What is the Civil Code §1542 waiver and do I need it outside California?

California Civil Code §1542 says that a general release does not extend to claims the releasing party does not know or suspect exist in its favor at the time of the release, if knowing them would have materially affected the settlement. To release unknown claims in California, the release must quote §1542 and state that the party waives it, which Section 4 does. Other states do not require the language but a few have similar rules, and including the waiver everywhere makes the release as broad as the law allows. It costs nothing to include.

What is the difference between a mutual release and a one-way release?

In a mutual release each party releases the other; that is the usual choice when both sides have possible claims, such as a landlord and tenant or two business partners. In a one-way release only the claimant releases the paying party, which suits a situation like an unpaid invoice where the payer has no claim of its own. The agreement lets you choose, and the paying party normally wants mutual.

Does settling mean admitting I was wrong?

No. Section 6 states that the settlement is a compromise of disputed claims and is not an admission of liability or wrongdoing by anyone. Neither party may use the agreement as evidence of fault. That is standard and it is what allows people to settle without conceding anything.

What happens if the pending lawsuit is not dismissed?

The claimant must file a dismissal with prejudice within the number of days you set after receiving the settlement payment, and both parties must sign any stipulation the court requires. With prejudice means the case cannot be refiled. If the claimant fails to dismiss, the paying party may file the agreement with the court and ask for dismissal and for its costs.

Can I leave the amount blank for the other side to propose?

Yes. Any blank you leave becomes a field the other party fills in when they open the link, and you see it before you sign. Most senders fill in the settlement amount and the payment date, since those are the deal, and leave the other side’s name, address and email for them to complete.

Should the settlement be confidential?

Often the paying party wants confidentiality so the settlement does not invite similar claims, and the receiving party may prefer freedom to speak. Choose confidential and the terms may only be disclosed to lawyers, accountants, insurers, immediate family, as required by law or to enforce the agreement. Note that a confidentiality clause cannot prevent anyone from reporting unlawful conduct to a government agency, and some states restrict confidentiality in settlements of sexual harassment and certain other claims.

Related templates

This template is general information, not legal advice. Laws differ by state; review anything important with a lawyer.

Settlement agreement and mutual release