However, the terms or even the very existence of a verbal settlement may be far more difficult or even impossible to establish at a later date. When one or more parties are represented by counsel, it is normally anticipated that either or both advocates will seek and finalize a written memorialization of all critical settlement terms. If any difficulty is encountered in securing an adversary s signature to a proposed writing, a useful and frequently effective alternative, whether or not attorneys are involved, is to compose an informal, perhaps self-serving letter confirming the major provisions of the oral settlement agreement. This letter should be transmitted to the other party, expressly advising that if no reply is promptly communicated then the stated terms shall be deemed to be accurate. The terms of any settlement should not be so complex and intricate that there will be a high probability of future litigation with respect to compliance with or alleged breaches of the agreement.
Simplicity is a virtue.
The more complicated the terms of any settlement, the more likely that there will be future issues with respect to possible or claimed breaches. As with any contractual format, the settlement terms must be formulated and finalized in clear, concise and readily understandable language. Settlement agreements may fall into two different categories. Perhaps the most frequently encountered type of settlement is one that is frequently referred to as an Accord and Satisfaction. The accord is the actual mutual agreement, consisting of the exchange of promises for some substituted performance, and the satisfaction is the actual performance or the giving of the agreed consideration.