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Definition: Settlement

It is an agreement of resolution to a dispute between two parties about a legal case. It can be done even before or after reaching the court. Structured settlements require payments at periodic intervals. It is the result when the plaintiff and defendant sue each other in civil proceedings and can also end the dispute without a trail. It is a contract for the bargain that both the parties have conducted and the claims are mentioned in the settlement.

The court enforces the settlement but if it is breached then the party in default may be sued for breach of contract. Sometimes even the party at fault may be required to restore the original action. After a joint stipulation conducted by the parties, the legal requirements mentioned in the settlement of the lawsuit is put into action by an order of the court. Simply filing a notice of case dismissal can also led to settlement between plaintiff and defendant and is a proof of satisfaction between two majorities of cases the settlement is based on monetary resources. As it causes a lot of cost thus both the parties often have a strong incentive to settle in order to avoid legal fees, finding expert witnesses, etc. Ailing with this stress and time is another factor for conducting trails. Thus parties conduct a settlement conference where one party starts with a settlement offer and both of them attempt to reach to a settlement point.

Settlement in finance is of securities related to business process, where against payment of money, securities or interests in securities are delivered, in order to fulfil the contractual agreements due to securities trades.

Security settlement consist of delivery of securities and the corresponding payment due to the trade entailed delivery obligations. Settlement consist of delivery of securities from one party to another and it takes place against payment known as delivery versus payment, but some are free delivery i.e. without corresponding payment. For example the delivery of securities collateral against a loan of securities.


Hence, this concludes the definition of Settlement along with its overview.


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