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Step by step guide - Preparing terms of settlement

Information about preparing a written agreement after settling the case.

If you and the defendant come to an agreement about how the case should be finalised, you should write down and sign your agreement. 'Terms of settlement' is one way you can do this. 

To find out how to prepare terms of settlement, follow the steps in the guide on this page. 

You can talk to the defendant about settlement at any time. By talking to the defendant you might be able to agree to 'terms of settlement', or a 'settlement agreement'. 

Terms of settlement can deal with many issues related to the case, such as:

  • ​​​whether the defendant pays you
  • how much the defendant pays you 
  • when and how often the defendant pays you 
  • who pays for each other's legal costs and expenses
  • how the court case should be ended

If you negotiate in writing, you can write the words 'Without prejudice' at the top of your correspondence. This means that one party can't use evidence of settlement discussions against the other party if the case goes to a hearing.​​​​

It is a good idea to put a settlement agreement in writing once you've agreed to the terms. Putting it in writing means there is written evidence about what was agreed. It also reduces the chance of confusion about the terms. 

There is no set format for terms of settlement, but there are some things you should include, such as: 

  • ​​your full name and address and the defendant's full name and address
  • the details of the court case that has been started, such as court case number, registry and division
  • the date of the agreement
  • any amount that has to be paid
  • if payment is by instalments, how much are the instalments and when each instalment must be paid
  • whether there is an agreement about the payment of interest
  • if part of the agreement includes judgment in your favour
  • how the case is to be ended, either by an order of the court or notice of discontinuance
  • what will happen if one party doesn't do what they have agreed to do. 

If the terms of settlement is for something other than the payment of money the court may need to adjourn your case to make sure the defendant does what they agreed to do. You should get legal advice​ before agreeing to terms of settlement.  

Instructions:  Instructions for writing terms of settlement.

Samples: 

Once you and the defendant have written down your agreement, you both need to sign it. Each of you should have your signatures witnessed and the witnesses should provide their full names and addresses under their signatures. It is a good idea if a lawyer or officer of the court (such as a registrar) witnesses the signatures. 

Once you have a signed settlement agreement, you can end the case. There are a number of ways you can do this:

  • Notice of discontinuance
  • Consent judgment or order
  • Do nothing

Notice of Discontinuance 

You can end the case by filing a notice of discontinuance. This is a notice telling the court that you no longer want to go ahead with the court case. It doesn't tell the court anything else about your settlement agreement. If the defendant has filed a defence, they will also need to sign the notice of discontinuance.  For more information, see Step by step guide - Notice of Discontinuance.

Consent judgment or order

A Consent judgment or order is filed with the court if both you and the defendant have agreed to settle the case. It can include some or all of the terms of settlement and is included as part of the court's records. ​ For more information, see Step by step guide - Consent judgment or order.  

Do nothing

If you and the defendant agree to the terms, sign and exchange the agreement, and then do nothing further, the court may dismiss your case. 

 The court may also make a costs order against you if the case is dismissed because you, as the plaintiff, took no further action.