Quite often, there is a sense of relief when you agree to settle a dispute. But before everyone rushes off to pop the champagne bottles, it is important to document the terms of the settlement correctly. A Deed of Settlement (also know as a Deed of Release) is usually a short, confidential document between the parties in the dispute.

Parties can draw up a Deed, whether they have commenced Court proceedings, or negotiated a settlement to a dispute that remained unlitigated.

So, what should parties consider when entering into a deed? We set out a checklist below.

Checklist for Deed of Settlement

  • Who are the parties to the settlement? Are there any guarantors or directors that the Deed should include as parties?
  • Succinctly summarise the background facts that led to the parties entering the Deed (commonly called recitals).
  • Does the settlement involve the payment of money from one party to another? If so, on what terms is payer going to pay the money? Will it be one lump sum before parties execute the deed, or by instalments?
  • If the money is paid in instalments, what happens if the payer defaults? What can the other party do to ensure that they are paid in full? There Deed should include a mechanism ensuring that that the payee can easily bring proceedings to recover the outstanding instalment payments. You do not want to ‘re-litigate’ the matter from the beginning.
  • Parties enter the Deed with no admission as to their liability.
  • What about future liability? Is one party releasing the other from any current or future liability? Or are both parties agreeing to release each other from all future claims, demands and actions? What exactly are you being asked to release?
  • To what extent are you being asked to release third parties? Should you be releasing third parties?
  • Are there Court proceedings on foot between the parties? If so, the Deed will address the finalisation of the proceedings. Typically a form of Notice of Discontinuance, or Consent Orders agreed to by the parties to end the Court proceedings will be annexed to the Deed.
  • The deed should include a clause barring future legal proceedings, except to enforce the terms of the Deed.
  • Does the Deed contain a confidentiality clause? You should remember that there are limited circumstances where the parties cannot enforce a confidentiality clause. For example, where the parties need to release the terms of the Deed to the Court, or for a public purpose.
  • A warranty that all the parties to the Deed have obtained independent legal advice relating to the terms of the settlement and the Deed.
  • If parties need to issue notices about the Deed, where do those notices get sent?
  • What jurisdictions cover the settlement and the Deed? I.e. The laws of Queensland might govern the Deed.
  • Can the Deed be signed in counterparts? That is, each party to the Deed can sign a ‘copy’ (counterpart) rather than everyone having to sign the one document.

There is obviously a lot to consider when entering a Deed of Settlement. LegalVision’s dispute resolution lawyers can help you negotiate a settlement, as well as draft a Deed of Settlement to protect you and your position.

Questions? Get in touch on 1300 544 755.

Emma George

Ask Emma a Question

If you would like further information on any of the topics mentioned in this article, please get in touch using the form on this page.