Agreements and settlements

Making an agreement

Before a court case starts, or during a court case, you and the other party might agree to a solution to end the case. Agreements and settlements are usually in writing.

A deed of release is often used to end a dispute where a court case has not been started. A deed of release can also be used even where a court case has been started, along with consent orders or a notice of discontinuance.

A settlement is an agreement between the parties to a court case to solve the matter themselves, before the case is decided by the court. Settlement agreements are often made with consent orders, which can include judgment by consent.

Before making an agreement or settlement, you should get legal advice.

Deeds of release

A deed of settlement is a legal document that contains the agreement between the parties to resolve a dispute.

In a deed of release, one person gives up their legal rights or claims they may have had in exchange for something they want, like money or other things.

A deed of release does not require consideration but must be written, signed, sealed and delivered.

Before you draft or sign a deed of release, you should get legal advice.

For a helpful tool to use when writing a deed of release, see Checklist - Writing agreements and settlements.

A simple deed of release starts by stating the date it was made and naming who the parties involved are:

​The next part is usually called the 'Recitals' and it contains background information and an explanation of the dispute:

It’s important for the recitals to clearly say what dispute the deed is meant to resolve. The release should only apply to the issues mentioned in the recitals or those that the parties were specifically thinking about when they signed the deed, not unrelated matters.

After the 'Recitals', the next section of the deed describes the actual agreement reached between the parties and the effect of that agreement. This is called the 'Operative Part'.

The 'Operative Part' can include sections that deal with:

• the terms of settlement (including who will pay what, what the release will be, and what will happen when payment is received)
• the release clause should detail what rights or claims one party gives up in exchange for something else, like compensation or other considerations
• definitions
• confidentiality
• taxes
• which state or territory laws apply to the deed.

For example:

Next comes the execution, where the parties place their signatures. A deed usually has each signature witnessed.

For example:

Your signature on a deed may need to be witnessed, depending on whether you sign as an individual or on behalf of a company. If you are not sure about the signing requirements on the execution page of a deed you should get legal advice.

When signing (executing) a deed of release, you should make sure that there are copies for each of the parties involved. Often a deed of release will be 'executed' when one party provides their signed copy to the other party, and the other party in turn provides their signed copy to the first party. This is known as an 'exchange'. On exchange, each copy of the deed should be an exact copy of the other.​

Settlements

If a dispute has reached court, a deed of settlement and release may not be necessary.

If you and the other party reach an agreement after a court case has started, you may be able to write and file: ​

• terms of settlement
• consent orders
• a notice of discontinuance (a notice filed by the plaintiff or applicant ending the case).

For a helpful tool to use when writing settlements, see Checklist - Writing agreements and settlements.

Terms of settlement

'Terms of settlement' is a document that records the agreement to settle a case between parties in dispute.

When you reach an agreement it is a good idea to put the details of the agreement in writing. The written agreement can be added to the court record if you want or if the court makes an order. The agreement doesn't have to be in any specific form, however, it should be written clearly and precisely.

Any agreement to settle should refer to the court proceedings and what will happen to them now that the matter has been settled. For example, the terms of settlement might say that a consent order or judgment will be given, or a notice of discontinuance will be filed.

The agreement should be promptly signed by all the parties.

For an example of what terms of settlement could look like, see:

Sample: Sample terms of settlement

Consent orders

Consent orders are orders agreed to by both parties to a dispute and then made by the court. If you reach an agreement, you may want to have the court make consent orders. Consent orders are generally easier to enforce than an agreement as they have the same effect as a decision of the court. You can agree that consent orders will be filed with the court in your terms of settlement and write what the consent orders will be in that document.

Consent orders will usually include parts of the agreement that:

• say what one party has to pay the other, which is sometimes a compromise amount
• say when or how payment is to be made
• say what will happen if payment isn't made, such as the original amount of the claim plus costs and interest being payable
• say whether one party will pay the other party's costs, or if each party will pay their own costs.

Not all parts of the terms of settlement have to be part of the consent orders. There may be some parts that the parties want to keep confidential.

Consent orders should include:

• the names of the parties and the case details
• a list, in numbered paragraphs, of the terms of the order the parties have agreed to
• the names and signatures of each party to the case
• the court seal and signature of the judicial officer (for example a magistrate) who made the order.

Once the court seals (stamps) the consent order it becomes an order of the court.

For an example of what consent orders could look like, see:

Sample: Sample consent order

Notice of discontinuance

If the parties come to an agreement to settle after a court case has been started, it does not always mean that consent orders have to be filed to finalise the case. Instead, the party who started the case (the plaintiff or applicant) can file a notice of discontinuance. This is a notice to the court that the plaintiff or applicant is withdrawing their claim and does not want to continue their case.

A notice of discontinuance will usually be filed if the plaintiff and the defendant have agreed that the plaintiff does not want to go ahead with their claim. If the defendant has filed a defence or entered an appearance (indicated that they will be defending the case), in some cases the plaintiff may need to get the defendant's consent (permission) to file the notice of discontinuance, or the court's permission.

In some cases, if you file a notice of discontinuance, you may have to pay the other party's costs. Before you file a notice of discontinuance, you should get legal advice.

For an example of what a notice of discontinuance could look like, see:

Sample: Sample notice of discontinuance