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Settlement Agreement template

A settlement agreement ends a dispute between two parties by setting out the agreed payment or actions, a release of claims, and terms such as confidentiality and no admission of liability.

A settlement agreement is a contract that resolves a dispute: one party usually pays or does something, and in exchange the other releases its claims, so neither has to go to court or continue a lawsuit. You need one whenever you agree to end a dispute, because a handshake deal leaves the claims open.

Use this template — sign onlineOpens as a ready-to-send document with signature fields placed.
Replace everything in [BRACKETS], export to PDF, then send it for signature.

1. Parties

This Settlement Agreement and Release (the "Agreement") is made on [DATE] between [PARTY A NAME], of [PARTY A ADDRESS] ("Party A"), and [PARTY B NAME], of [PARTY B ADDRESS] ("Party B"), together the "Parties".

2. Background

A dispute has arisen between the Parties concerning [BRIEF DESCRIPTION OF THE DISPUTE, e.g. unpaid invoices under the services agreement dated DATE] (the "Dispute"). [If applicable: The Dispute is the subject of [CASE NAME AND NUMBER] pending in [COURT] (the "Action").] The Parties wish to resolve the Dispute fully and finally on the terms below.

3. Settlement Payment

[PAYING PARTY] will pay [RECEIVING PARTY] the total sum of [AMOUNT] (the "Settlement Payment") by [PAYMENT METHOD] [in one payment on or before DATE / in installments of AMOUNT due on DATES]. If any payment is more than [NUMBER] days late and not cured within [NUMBER] days after written notice, [CONSEQUENCE, e.g. the full unpaid balance becomes due immediately].

4. Other Obligations

In addition, the Parties agree to: [OTHER TERMS, e.g. return of equipment, correction of a public statement, cancellation of a contract, or NONE].

5. Release of Claims

Upon receipt of the full Settlement Payment, [RECEIVING PARTY / EACH PARTY] releases and forever discharges [THE OTHER PARTY / THE OTHER PARTY], and its officers, employees, and agents, from all claims, demands, and causes of action, known or unknown, arising out of or relating to the Dispute up to the date of this Agreement. This release does not cover obligations created by this Agreement, or any claim or right that cannot be waived by law.

6. Dismissal

[If applicable:] Within [NUMBER] days after receipt of the full Settlement Payment, [PARTY] will file a dismissal of the Action with prejudice, with each Party bearing its own legal fees and costs unless stated otherwise here: [TERMS].

7. No Admission of Liability

This Agreement is a compromise of disputed claims. Nothing in it is an admission of liability or wrongdoing by either Party.

8. Confidentiality and Non-Disparagement

The Parties will keep the terms of this Agreement confidential, except as required by law, to enforce this Agreement, or for disclosure to their legal, tax, and financial advisors. [OPTIONAL: Neither Party will make false or disparaging public statements about the other regarding the Dispute.] Nothing in this Agreement prevents a Party from reporting possible violations of law to a government agency or from giving truthful testimony.

9. Representations

Each Party confirms that it has read and understood this Agreement, has had the opportunity to consult a lawyer, signs it voluntarily, has authority to sign it, and has not assigned any claim released by it to anyone else.

10. General Terms

This Agreement is governed by the laws of [GOVERNING LAW JURISDICTION]. It is the entire agreement between the Parties about the Dispute and replaces all prior discussions. It may be changed only in writing signed by both Parties. If any provision is held invalid, the remainder stays in effect. The Parties agree that this Agreement may be signed electronically and in counterparts, each of which is an original and all of which together form one agreement.

11. Signatures

PARTY A: [PARTY A NAME] Signature: ____________________ Name and title: [SIGNATORY NAME, TITLE] Date: [DATE] PARTY B: [PARTY B NAME] Signature: ____________________ Name and title: [SIGNATORY NAME, TITLE] Date: [DATE]

Our take: Our take: the release clause is the heart of a settlement, and it is also where people get burned. Define exactly which dispute is being released, decide whether the release is mutual, and don't assume every claim can be signed away. Some cannot: for example, many employment-related rights, such as filing a charge with a government agency, and certain wage claims, can't be waived privately, and releases of age-discrimination claims by US employees over 40 have specific timing and wording rules. If a lawsuit is already filed, the settlement also needs a dismissal. For an employee leaving a job, our severance agreement is purpose-built. Because the stakes are high, have a lawyer review the final draft.

When should you use a settlement agreement?

  • When two businesses resolve a contract or payment dispute out of court
  • When settling a claim with a customer, supplier, landlord, or tenant
  • When a pending lawsuit or demand will be dropped in exchange for payment
  • When you want the terms of a resolution and the release in one signed document

How do you fill in this template?

  1. Describe the dispute precisely so the release covers exactly what you mean to settle.
  2. Fill in the payment amount, schedule, and what happens if a payment is missed.
  3. Choose a one-way or mutual release, and delete the dismissal section if no lawsuit was filed.
  4. Have a lawyer review the draft, especially for employment, consumer, or injury claims where special rules apply.
  5. Upload the final version to eSignSimple and send it to both parties; the certificate of completion records when each signed.

How do you get it signed online?

  1. Save it as Word or PDF. Paste the filled-in text into Word or Google Docs and keep it as a .docx file, or export it as a PDF. eSignSimple accepts both, plus DOC, ODT and RTF, up to 25 MB; Word files are converted to PDF on upload.
  2. Upload and place the fields. Sign up with Google, upload the file and drag signature, initials, date and text fields onto the page for each signer. Set a signing order if one party must sign first.
  3. Send it for signature. Each signer gets a private link and signs in the browser without creating an account. Automatic email reminders go out every three days (up to three) until everyone has signed.
  4. Keep the signed copy. When the last person signs, everyone can download the final PDF with a certificate of completion, an audit trail and a SHA-256 fingerprint you can verify later.

Signing on your own device only? The guide to signing a PDF covers the free built-in options, and the security page explains how signed files are stored and verified.

This template is general information, not legal advice. Laws differ by country and state; have a lawyer review contracts with high stakes.

Written by Buğra Sözeri, founder and editor, eSignSimple · Last reviewed

Buğra builds eSignSimple and writes and maintains its guides. He researches each legal page against the official texts linked on it and updates pages when the law or the product changes. He is not a lawyer, and nothing here is legal advice. About eSignSimple

Frequently asked questions

Can every claim be released in a settlement agreement?

No. Some rights can't be waived by private agreement, such as certain wage and employment rights and the right to file a charge with a government agency, and some releases need special wording or timing. A lawyer can tell you what applies.

Does a settlement mean admitting fault?

Not usually. Most settlements, including this template, state that the agreement is a compromise and not an admission of liability.

What happens if the other side doesn't pay?

The settlement agreement itself becomes an enforceable contract. Section 3 lets you accelerate the unpaid balance, and you can sue for breach of the settlement.

Can a settlement agreement be signed electronically?

Generally, yes, in the US and many other countries. Courts may have their own rules for documents filed in a case, so check those separately.

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