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“Negotiation and discussion are the greatest weapons we have for promoting peace and development” ~ Nelson Mandela


  • A Settlement Agreement or Deed of Settlement is a legally binding contract between two disputing parties.
  • Settlement Agreements are common in issues involving family disputes, property disputes, employment disputes, and disputes between two public sector enterprises, among others.
  • Settlement Agreements are cost-effective and time-saving.
  • The Agreement should be duly signed by the disputing parties and should be registered. Failure in doing can cause the deed to be challenged in court later.
  • Deed of Settlement cannot bind anyone other than a party to the contract.


Where people are living together or working together, squabbles and disputes CANNOT be avoided and it is natural human behaviour. Every person has a different nature and a different attitude so a clash of interest is inevitable in most cases, especially when both the parties to the conflict are adamant.

We all know how lengthy and tedious court proceedings can be. However, there are various other options available to solve a case outside the Court, like Arbitration, Mediation, etc. But, if you want to avoid going through the stress of such proceedings and costs involved in it, you do have one other option – A Settlement Agreement! If you and the other party are willing to settle the matter minus the proceedings, you can always go for a settlement agreement that is just as effective as it is legally binding.

If you have a little knowledge about it and want to know about the same, fear not! We are there for you! All you have to do is free a few minutes and read the article through to have your doubts cleared. What does this Article include? It includes the meaning of Settlement Deed, the need for it, & its scope.


Litigation proceedings, as we already know and have established are time-consuming and take a toll on both time and finances. Settlement Deed is a comparatively efficient way out as it is time-saving and cost-effective in dealing with a legal matter.

A Deed of Settlement or Settlement Agreement is a legal document that formalises an agreement between the parties to settle a dispute. It has legally binding terms the parties have mutually agreed upon. The Agreement prevents either of the parties from commencing any legal proceedings and the settlement is deemed to be final.

For example, let’s take an employment dispute between an employer and an employee. Rather than going for legal proceedings, the aggrieved parties can enter into a negotiation. Each party can have an opportunity to voice their issues and interest and come to a peaceful settlement. The parties can negotiate possible solutions and mutually agree upon certain terms rather than deal with an adversarial situation in Court.

In case of family disputes or property disputes in a family, the family members can mutually work out an agreement on how a property should get distributed or come to negotiation among themselves. A family settlement agreement is usually done to settle joint property disputes that the family owns as opposed to self-acquired property.


‘Consilia omnia verbis prius experirim, quam armis sapientem decet’ is a legal maxim that suggests that an intelligent man would consider negotiation before using arms.

Negotiation in law, is a process of dispute resolution between the parties through mutual understanding and agreement. It is a contemporary form of dispute resolution.


Negotiation is a good option and this can sometimes be Court-ordered before a trial. Executing a deed of the settlement will help finalize the matter and the interests of both the parties can be met effectively so it can be called a win-win situation. There are several other reasons you may wish to execute a Deed of Settlement. These include:

  • As settlement can be done outside the court, the parties avoid the stress and costs involved in litigation.
  • As most Settlement Deeds include the clause of confidentiality, the parties can settle their dispute without attracting publicity. This helps to keep the legal issue and agreement private and confidential.
  • This is a very flexible way to resolve a dispute. The parties have the freedom to settle for what they wish and can have their individual interests met. Most of the time interests of both parties are satisfied and a resolution can be done without any admission of guilt. However, there’s a chance both parties might not receive all the terms they initially sought.


The deed helps settle a dispute between any parties. However, a Deed of Settlement cannot bind anyone other than a party to the contract. It should be noted that a deed between two parties cannot serve to obstruct the work of statutory bodies. Such a Deed has no affect if it is against public policy or contrary to law or if its purpose is to conceal some illegal and unlawful activity.


  • The Settlement Deed should include the date when the deed is made.
  • Parties involved in the dispute along with their age and residential address should be mentioned.
  • Recitals are needed to be discussed in a nutshell about the background of the issue and the case.
  • Next up are the terms of settlement that layout the jurisdiction that governs the breaches of the agreement and any relevant confidentiality clauses. The amounts that must be paid in case of a breach can be included.
  • The Settlement Agreement should be duly signed. In case of the absence of even one signature of the parties concerned, it can become a ground for challenging the document in court later on.
  • The Agreement has to be registered if the subject matter of the settlement is an immovable property.
  • The Agreement may be signed by two witnesses but it is not absolutely necessary.


Clashes of interest and disputes are an unavoidable part of life. But we do have options for resolving them peacefully. Sometimes, taking a step back can help you reach your destination more proficiently and quickly. Instead of keeping making rounds at Court, you can do smart work.

A Deed of Settlement is created as out-of-court negotiation between two parties. We already know the benefits of entering into a Settlement Agreement. The benefit of agreeing to such an agreement is to avoid the need to engage in legal proceedings that are costly and time-consuming. In case if you fail to execute the Settlement Deed, consider arbitration or mediation to resolve your legal disputes. Always remember that there are other alternatives to resolve your dispute. You can always resolve issues amicably.

If the dispute is regarding something that is not a very serious issue or a mediocrely serious issue, you can always go for a Settlement agreement. If it’s something that cannot be resolved through Deed of Settlement, options like mediation or arbitration or always open and in extremely serious issues, Court is the best option. Make sure you get in a contact with an efficient disputes resolution lawyer for relevant legal advice.

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