How to Draft a Deed of Settlement and Release

by Greg Carter, Fixed-Fee Litigation Lawyer

How to Draft a Deed of Settlement and Release

The purpose of a Deed of Settlement and Release is to bring to an end (‘fully and finally settle’) a legal proceeding and/or any dispute.

However if a Deed of Settlement and Release is not properly drafted a fresh dispute can arise over what it means and what it covers, so it is important to get it right. 

In a worst case scenario the underlying legal proceeding/ dispute may not be fully and finally settled.

On the other hand, if a Deed of Settlement and Release is properly drafted the underlying legal proceeding/ dispute will be fully and finally settled.  And a new legal proceeding can be brought, if necessary, to enforce the Deed of Settlement and Release.

When drafting a Deed of Settlement and Release it is important to consider a range of important issues, including the following:

  1. Parties: all parties must be properly described with their correct legal names
  1. Definition of legal proceeding/ dispute: the legal proceeding and/or dispute must be defined in such a way that it leaves no room for doubt what the Deed covers
  1. Payment of money: the amount of any money to be paid must be clear, also when it is to be paid
  1. Property sale/ transfer: the description of any property to be sold/ transferred must be clear, also when that is to happen and any intermediate steps required
  1. Legal proceeding: consider the terms on which any legal proceeding is to be brought to an end, including how any costs orders are to be addressed
  1. Releases: consider the terms on which the parties will release each other from liability in relation to the dispute. Also consider whether releases should be given by, or in favour of any related and/or third parties.
  1. Indemnities: consider the terms of any indemnity (to cover expenses and loss) if any party breaches the Deed
  1. Warranties: consider the warranties that should be given regarding each party’s authority to enter into the Deed
  1. No admission of liability: consider whether the settlement should be on the basis of ‘no admission of liability’
  1. Confidentiality: consider whether the terms of settlement should be confidential and whether there should be any exceptions
  1. Non-disparagement: consider whether the parties should agree not to disparage each other after the Deed is entered into
  1. GST: consider whether GST might apply to any supply made under the Deed, and how this is to be addressed
  1. Independent legal advice: consider whether each party should obtain independent legal advice, and record this fact in the Deed
  1. Costs: consider which party will prepare the Deed and whether each party will bear their own legal costs of negotiating and entering into the Deed

Drafting a Deed of Settlement and Release is risky if you don’t know what you’re doing.

Please contact me if you would like assistance.

Greg Carter is a freelance litigation lawyer based in Perth, specialising in fixed-fee commercial dispute resolution.

Greg offers a free consultation and a ‘no obligation’ quotation.

For more information please call Greg on 0422 406 929 or email gc@gregcarter.com.au.

Or see his website www.gregcarter.com.au.



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