How to write a settlement agreement between individuals: items and cautions
Even a dispute you settled by talking can flare up again later if the terms are not written down in a settlement agreement.
What to include
The basics are: (1) what the settlement is about (date, place and event), (2) the settlement amount, (3) the payment deadline and method, (4) a closing clause, and (5) the parties’ signatures.
Describe the event specifically enough to tell it apart from anything else, for example “the contact between Party B’s vehicle and Party A’s vehicle in the ◯ parking lot on October 1, 2026”.
Make “this ends it” clear with a closing clause
A clause such as “Apart from what is set out in this agreement, the parties confirm that neither has any further claim against the other regarding this matter” helps prevent additional demands later.
Think carefully, however, before giving up claims for damage that only appears later, such as lasting effects of an injury. If anyone was hurt, we recommend consulting a professional.
Protect yourself until payment is complete
If the settlement is paid in installments, include the same clause as in a loan agreement: the full balance becomes due after a missed payment. Confirming the other person’s address and real name also helps if payments stop.
This is general information, not legal advice. Laws differ by country, so ask a professional about your specific situation.