A Settlement Agreement is used when a conflict has already occurred or may occur to settle the dispute out of court.
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Any legal connection, whether between an employer and an employee or a landlord and a tenant, is likely to result in a conflict. To prevent lengthy and expensive legal actions, it may be prudent to establish a Settlement Agreement to resolve differences out of court . During talks, the parties may agree on certain matters yet disagree on others. When an agreement is made, a Settlement Agreement may be signed, but it must be balanced! And who better to obtain this agreement than a Settlement Agreement produced by a lawyer or to benefit from the aid of a lawyer in negotiating the parameters of the Settlement Agreement? Get a Settlement Agreement model and the support of an Indian lawyer who specializes in litigation and negotiation when you work with Themis Partner.
When it becomes impossible to resolve a dispute through talking, mediation, or formal procedures, there is another tool available when the parties reach agreement to the end of an employment relation: a Settlement Agreement.
The settlement agreement, sometimes known as a “compromise agreement,” is used to lay out the details of an agreement to resolve an employment dispute. In most cases, an employer proposes to engage into a contract.
A Settlement Agreement is a legally enforceable contract that is often entered into between an employer and an employee. Under exchange for financial compensation, the employee frequently waives the right to file a financial claim against the employer in this contract.
Compromise agreements serve several functions. The settlement agreement is used to resolve disagreements at any time in the partnership, not only at the end of an employment term.
A Settlement Agreement can also be used to resolve an ongoing employment dispute, such as one over holiday pay or housing allowance. These agreements are typically presented by the employer; however they can be proposed by either the employer or the employee.
When all other methods of resolving disputes or differences in employment or in relation to any agreement and its clauses have failed, settlement agreements offer a quick resolution and are generally less time-consuming and stressful than a tribunal. However, settlement agreements are costly since they include the expense of cash compensation. They also have the ability to wreak havoc on broader employment relations if employed incorrectly.
A Settlement Agreement must be in writing and have the following provisions in order to be valid:
| ➤ An offer is something that one side pledges to perform |
| ➤ Acceptance of the other party's terms of that offer |
| ➤ Valid consideration on both parties, which can be any physical or intangible advantage as long as it is reasonable and supplied freely |
| ➤ Mutual assent, which implies that both parties agree without being forced to |
| ➤ A legitimate goal |
