What is a Settlement Agreement?
A Settlement Agreement is an agreement between two parties to waive a legal claim. When you waive a claim, you agree not to proceed with legal action in exchange for compensation. Simply put, it is a way to settle a dispute out of court.
A liability release can be used to waive a claim for damages that have already occurred, e.g., after a motor vehicle accident. It can also be used to waive any future claims for injuries or damage. For instance, you may be asked to sign a waiver form before participating in any physical or high-risk activity.
Who should use a Settlement Agreement?
The parties involved in the Settlement are:
- The releasee: the party who is making a payment in order to be released from a possible claim
- The releasor: the party who is receiving money or other consideration in exchange for abandoning their claim
A Settlement Agreement should contain the following information:
- Type of liability release
- Releasor and releasee names and contact information
- Details about the dispute or incident that took place (or in the case of an activity waiver, details about the activity that will be taking place)
- Compensation details, including amount and type of compensation
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