Although it is not necessary for a settlement agreement to be reduced to writing, with verbal settlements equally as binding, we encourage parties to conclude a written settlement agreement in order to ensure that the terms of the resolution are accurately recorded and given effect to. Verbal agreements often become subject to the old adage of "he said, she said" and, in circumstances where the consequences of a settlement could be far reaching, any risks are substantially mitigated through the conclusion of a written settlement agreement.
In reaching a settlement (and ultimately recording the terms in a written settlement agreement), parties may want to consider the following:
The parties
Payment
The settlement
Confidentiality
The legal proceedings
There are a number of additional considerations if the parties intend settling existing legal proceedings:
Breach
The considerations set out above are by no means exhaustive and are merely intended to guide the discussion between the parties on issues that have proven to be contentious in the past. They are also largely applicable to disputes of a domestic nature. Where the dispute being settled has cross-border implications, further considerations may arise, such as the governing law to apply to the agreement or the potential enforceability of the agreement. We therefore recommend that parties who wish to conclude a written settlement agreement should brief an attorney to properly review the terms of the agreement to ensure that all concerns and risks are adequately dealt with.