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Disputes and other

Settlement agreement template

Settlement agreement: A settlement agreement resolves a dispute: one party usually pays or does something, and both release the claims covered by the settlement.

Last reviewed 6 November 2026 · 6 clauses · General guidance, not legal advice

Upload yours for a review and e-signature, or save it as a team template.

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When to use a settlement agreement

  • Settling an unpaid invoice or contract dispute
  • Ending litigation or arbitration
  • Resolving a customer or supplier complaint

Settlement agreement template: clause-by-clause outline

Sample starting wording for each clause. Replace the text in [brackets] with your details.

  1. Background

    A dispute has arisen about [subject]. The parties wish to settle it without admission of liability.

  2. Settlement payment

    [Party A] will pay [amount] by [date].

  3. Release

    On payment, each party releases the other from all claims arising from the dispute.

  4. Proceedings

    The parties will withdraw [claim number] within [7] days of payment, each bearing its own costs.

  5. Confidentiality

    The terms of this settlement are confidential, except as required by law.

  6. No admission

    This Agreement is not an admission of liability by either party.

What to check before you sign

  • Is the scope of the release exactly right, neither too wide nor too narrow?
  • Is the payment schedule enforceable if missed?
  • Does a court need to approve the settlement?

How to send a settlement agreement for e-signature

  1. Draft or upload it. Use the outline above with your own wording, upload an existing document, or save it as your organisation’s template.
  2. Check it against your playbook. Points outside your positions are flagged, and approval rules route it to Legal when needed.
  3. Send it by email. Signers get a plain-language review and a secure link, sign on any device in the order you set, and can suggest changes as tracked changes.
  4. Keep the signed PDF. Everyone receives it with a certificate of completion, and key dates go to Upcoming with reminders.

Settlement agreement template: frequently asked questions

Can a settlement agreement be signed electronically?

In most commercial disputes, yes. Settlements involving employees, consumers or court approval may need extra steps.

What happens if the settlement is not paid?

You can usually sue on the settlement agreement itself, which is quicker than reviving the original dispute.

Is an electronically signed settlement agreement legally binding?

In most countries, yes. E-signatures are recognised for commercial contracts under laws such as the ESIGN Act (US), eIDAS (EU), the Electronic Communications Act (UK) and the Information Technology Act (India). econtracts.ai adds a certificate of completion with each signer’s identity check and a fingerprint of the signed content.

Can I get a settlement agreement I received reviewed?

Yes. Upload it to econtracts.ai and you get a plain-language review: key dates, money and points to check, each quoting the clause it comes from.

Related contract templates

Release of liability templateRelease of liability (waiver)Severance agreement templateSeverance agreementPromissory note templatePromissory note

This outline is a starting point for discussion, not legal advice, and it is not a complete contract. Laws differ by country and sector; have a qualified lawyer review contracts that matter.