Definition - What does Settlement Agreement mean?
A settlement agreement is a document where all parties in a court case, in civil law, agree to the outcome of any judgment being made in advance. In settlement agreements, there is no need for a lengthy court case. This saves both time and money. Settlement agreements are most often gained through mediation rather than through a trial. However, the judge will ultimately approve of the settlement if one is reached. Settlement agreements offer a situation where all parties are relatively happy with the outcome.
Justipedia explains Settlement Agreement
Settlement agreements take place mainly when the defendent admits liability in some way to the plaintiff. In cases of divorce, it can represent times where one spouse has always financially supported the family and therefore offers a stipend voluntarily to the other spouse. Ownership of major assets is commonly split during settlement agreements.