A deed of settlement, or deed of release, is drafted once an agreement has been made between two parties who have been in a legal dispute. The most common legal issues that are settled with a deed of settlement are employment law disputes and family law issues.
It is important to seek legal advice before signing a deed of settlement. Once you sign the deed, it ends the negotiation and settles the legal dispute.
What is usually included in a deed of settlement?
- The name of the parties that have agreed to the settlement of their dispute.
- A brief background of the dispute at hand and the relationship between the parties.
- The terms of the settlement that have been agreed to such as:
- Any amount of money that needs to be paid by either party;
- What happens if any party breaches the agreement;
- Payment of legal costs – usually each party pays their own legal costs, however as the settlement of deed is a joint legal cost – it is usually shared.
- The release of any liability whether it would be present or past in regards to the legal issue that has been settled upon;
- Confidentiality clause;
- A term to prevent the parties from discrediting each other.
- An execution page for each party’s signature as well as the signature of their witness which can either be a Justice of the Peace or a Legal Practitioner who holds a full practicing certificate.
Examples of deed of settlement
A deed of settlement is commonly used by employers when offering redundancies. A deed is often drafted and signed prior to handing over the money so that it protects the employer from further legal action.
In family law, the most common reason to use a deed of settlement is when there has been a legal dispute on foot regarding the sale or transfer of the ex-matrimonial home. When an agreement is decided between the parties a deed is sorted with the terms of the transfer/sale and what amount of money is going to be given to each party.
What if I have been forced to sign a deed of settlement?
It is important to seek urgent legal advice and provide a copy of the deed that you have signed. Depending on the situation, they may suggest that you apply to the court to have the deed set aside.