Within the legal system, a settlement refers to the resolution that is reached between two parties in regards to a legal matter. Settlements are often agreed upon before court, though they are also quite common after the case has reached the court and trial has begun. However, the term “settlement” can have various meanings and applications, depending on the context of law and situation.
A settlement, in its broadest definition, can be said to be a contract between two conflicting parties. A settlement is most common in the case that a plaintiff has levied legal action, or sued, the defendant on a particular issue or dispute. In many cases, both parties will decide to settle even before the court proceedings actually take place. This may simply entail reaching a compromise or agreement in regards to the matter and resolving it before needing the court’s interference. However, settlements can also occur during the course of a trial, in where a contract or agreement may prove to be more beneficial for both parties rather than incurring the possibility of a long and lengthy civil proceeding. To settle will also mean that the legal suit will be dropped as a result of a settlement agreement. All settlement agreements are put into writing and are enforced by the courts as a legal contract. In the case that the settlement agreement is breached in any way, one of the parties can sue the breaching party for breach of contract.
