Settlement Agreement as an Alternative to a Court Decision: Peculiarities of Conclusion and Enforcement

If you fail to reach an agreement with the defendant before filing a statement of claim, it doesn't matter, you will have a chance to do so in the courtroom.

Indeed, on the basis of mutual concessions, the parties may enter into a settlement agreement during the court hearing. Its purpose is to settle the dispute on terms acceptable to everyone, which will only concern the rights and obligations of the plaintiff and defendant. As part of such an agreement, citizens may go beyond the subject matter of the dispute if the settlement agreement does not violate the rights or legally protected interests of third parties.

The parties may express their intention to enter into a settlement agreement at any stage of the litigation by making a joint written statement. The settlement agreement is approved by a court order, which must contain its terms and conditions. By approving the settlement agreement, the court simultaneously closes the proceedings in the case by the same ruling.

It is worth noting that the court may also refuse to resolve the dispute in this way if:

- the terms of the settlement agreement contradict the law or violate the rights or legally protected interests of others, or are unenforceable;

- one of the parties to the settlement agreement is represented by its legal representative, whose actions are contrary to the interests of the person he/she represents.

Please note that in case of non-fulfillment of the court-approved settlement agreement, the court's decision to approve the settlement agreement may be submitted for its enforcement in accordance with the procedure provided for by the legislation on the enforcement of court decisions.