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Settlement Agreement Contract for the United Kingdom

Settlement Agreement Contract Template for England and Wales

A Settlement Agreement Contract under English and Welsh law is a legally binding agreement between parties to resolve a dispute without court proceedings or to end existing litigation. It typically includes terms of settlement, mutual releases, confidentiality provisions, and any specific obligations of the parties. The agreement must comply with statutory requirements, particularly when dealing with employment-related matters, and often requires independent legal advice to be enforceable.

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What is a Settlement Agreement Contract?

A Settlement Agreement Contract is used when parties wish to formally resolve their disputes without court proceedings or conclude existing litigation. Under English and Welsh law, these agreements are particularly common in employment contexts but are also used across various commercial and civil disputes. The document must address specific statutory requirements, particularly those under the Employment Rights Act 1996 and Equality Act 2010. It typically includes detailed settlement terms, releases, confidentiality provisions, and tax considerations. For employment-related settlements, independent legal advice is often mandatory for the agreement to be enforceable.

What sections should be included in a Settlement Agreement Contract?

1. Parties: Identification of settling parties and their details

2. Background: Context of dispute and reason for settlement

3. Definitions: Key terms used throughout the agreement

4. Settlement Terms: Core settlement provisions including payment terms

5. Release of Claims: Waiver and release of specified claims

6. Confidentiality: Obligations regarding non-disclosure of settlement terms

7. Governing Law: Specification of applicable law and jurisdiction

What sections are optional to include in a Settlement Agreement Contract?

1. Tax Indemnity: Used when settlement includes taxable payments requiring specific tax provisions and indemnities

2. Non-Disparagement: Mutual obligations not to make negative statements about the other party, typically used in high-profile or sensitive settlements

3. Future Cooperation: Provisions regarding future assistance or testimony in ongoing proceedings or investigations

4. Return of Property: Provisions for returning company/party property, particularly relevant in employment-related settlements

What schedules should be included in a Settlement Agreement Contract?

1. Schedule of Claims: Detailed list of claims being settled and waived

2. Payment Schedule: Detailed breakdown of payment amounts, timing, and payment methods

3. Deed of Release: Formal release document containing detailed terms of the settlement

4. Legal Advice Certificate: Certificate confirming that independent legal advice has been received by the parties

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

England and Wales

Publisher

Genie AI

Cost

Free to use
Relevant legal definitions



























Clauses





























Industries

Employment Rights Act 1996: Primary legislation governing employment rights, particularly relevant for employment-related settlements. Defines statutory rights that cannot be contracted out of and requirements for valid waiver of claims.

Equality Act 2010: Legislation addressing discrimination-related claims, ensuring settlement terms don't discriminate and covering protected characteristics.

Companies Act 2006: Key legislation for corporate parties, covering directors' duties and authority to settle when companies are involved in the settlement.

Civil Procedure Rules: Procedural rules including Part 36 (offers to settle), without prejudice communications, and enforcement provisions for settlements.

Limitation Act 1980: Establishes time limits for bringing claims and is relevant for determining the scope of waiver in settlement agreements.

Contracts (Rights of Third Parties) Act 1999: Governs third-party rights in settlement agreements and provides framework for excluding or including third-party rights.

Consumer Rights Act 2015: Relevant when one party is a consumer, ensuring fairness of settlement terms and protecting consumer rights.

Data Protection Act 2018 & UK GDPR: Legislation governing the handling of personal data and privacy provisions in settlement agreements.

Taxes Management Act 1970 & Finance Acts: Covers tax implications of settlement payments and requirements for tax indemnities in settlement agreements.

Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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