PERSONAL INJURY SETTLEMENT AGREEMENT AND MUTUAL RELEASE

(Alabama – Court-Ready Template)

[// GUIDANCE: This comprehensive template is drafted for use in Alabama personal-injury matters. Bracketed text—e.g., [PARTY NAME], [DATE]—must be customized for each file. Delete guidance notes before execution.]

TABLE OF CONTENTS

1. Document Header
2. Definitions
3. Operative Provisions
4. Representations & Warranties
5. Covenants & Restrictions
6. Default & Remedies
7. Risk Allocation
8. Dispute Resolution
9. General Provisions
10. Execution Block

1. DOCUMENT HEADER

Settlement Agreement and Mutual Release (this “Agreement”) is entered into and made effective as of [EFFECTIVE DATE] (the “Effective Date”) by and between:

(a) [PLAINTIFF FULL LEGAL NAME], an individual with a principal residence at [ADDRESS] (the “Releasor” or “Plaintiff”); and

(b) [DEFENDANT FULL LEGAL NAME], a [corporation / limited liability company / individual] organized under the laws of [STATE] with its principal place of business at [ADDRESS] (the “Releasee” or “Defendant”).

The parties are collectively referred to as the “Parties” and individually as a “Party.”

RECITALS

A. An incident occurring on or about [INCIDENT DATE] in [LOCATION] resulted in alleged personal injuries to Plaintiff (the “Incident”).
B. Plaintiff has asserted claims (the “Claims”) seeking compensation for bodily injury, pain and suffering, medical expenses, lost wages, and other damages against Defendant.
C. Without admitting liability, Defendant desires to settle all Claims, and Plaintiff desires to accept such settlement, upon the terms and conditions set forth herein.
D. The Parties intend that this Agreement constitute a full, final, and binding settlement and mutual release of all Claims.

NOW, THEREFORE, in consideration of the mutual promises and covenants herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

2. DEFINITIONS

For purposes of this Agreement, capitalized terms have the meanings set forth below; terms defined herein have the same meaning whether singular or plural.

1. “Affiliate” means, with respect to any entity, any other entity that controls, is controlled by, or is under common control with such entity.
2. “Claims” has the meaning given in Recital B and includes any and all claims, demands, causes of action, rights, damages, losses, costs, attorney fees, liens, expenses, and liabilities of every kind, whether known or unknown, suspected or unsuspected, fixed or contingent, arising out of or relating to the Incident.
3. “Court Approval” means (i) an order of an Alabama state court approving this Agreement pursuant to applicable minor-settlement statutes or court rules, or (ii) written confirmation of court approval not being legally required.
4. “Effective Date” has the meaning given in the Document Header.
5. “Medicare” means the health insurance program administered under Title XVIII of the Social Security Act, 42 U.S.C. § 1395 et seq.
6. “Minor” means a person who has not attained the age of nineteen (19) years, the age of majority under Alabama law.
7. “Minor Settlement Amount” means the portion of the Settlement Amount allocable to any Minor, if applicable.
8. “Released Parties” means Defendant, its past, present, and future parents, subsidiaries, Affiliates, insurers, reinsurers, shareholders, officers, directors, employees, agents, attorneys, successors, and assigns.
9. “Releasing Parties” means Plaintiff and, if applicable, the parent(s), guardian(s), heirs, personal representatives, executors, administrators, and assigns of Plaintiff.
10. “Settlement Amount” means the total consideration described in Section 3.1, inclusive of all attorney fees, costs, liens, and subrogation interests, subject to structured-settlement terms if elected.
11. “Structured Settlement” means periodic payments funded through an assignment to a qualified annuity issuer pursuant to Section 3.2 below.

[// GUIDANCE: Add project-specific definitions as needed.]

3. OPERATIVE PROVISIONS

3.1 Consideration; Payment Terms

a. Defendant shall pay, or cause its insurer to pay, to Plaintiff the “Settlement Amount” of [U.S. $__] in full and final settlement of all Claims.
b. Payment shall be made within [______] days after (i) receipt of an executed original of this Agreement, (ii) receipt of a completed IRS Form W-9 from Plaintiff or Plaintiff’s counsel, and (iii) satisfaction of all conditions precedent outlined in Section 3.3.
c. Payment Delivery: [check / wire transfer] payable to [LAW FIRM TRUST ACCOUNT] F/B/O [PLAINTIFF].

3.2 Structured Settlement Election (Optional)

a. If [YES/NO], the Parties agree that all or a portion ([specify amount]) of the Settlement Amount shall be funded through a Structured Settlement in accordance with Alabama Structured Settlement Protection requirements.
b. Funding shall be accomplished by assignment to [ASSIGNMENT COMPANY] which shall purchase an annuity from [ANNUITY ISSUER] providing for periodic payments as set forth in Exhibit A (Payment Schedule).
c. Plaintiff shall cooperate in executing any additional assignment documents required to effectuate the Structured Settlement.

[// GUIDANCE: Structured Settlements in Alabama are subject to court-approval and disclosure rules; confirm compliance with the Alabama Structured Settlement Protection Act before closing.]

3.3 Conditions Precedent

The following constitute conditions precedent to Defendant’s payment obligation:
1. Delivery of duly executed mutual releases in the form of this Agreement;
2. Court Approval for any Minor Settlement Amount or written opinion of counsel that no such approval is required;
3. Resolution or waiver of all healthcare, workers’ compensation, ERISA, Medicare, Medicaid, Veterans Affairs, and other liens (collectively, “Liens”) in accordance with Section 7.3; and
4. Execution of a closing statement by Plaintiff and counsel confirming allocation of settlement proceeds.

3.4 No Admission of Liability

The Parties expressly acknowledge that this Agreement is a compromise of disputed claims. Nothing herein shall be construed as an admission of liability, fault, or wrongdoing by any Party, all of which is expressly denied.

3.5 Dismissal of Action

Within five (5) business days after receipt of the Settlement Amount, Plaintiff shall file a stipulation of dismissal with prejudice in [COURT AND CASE NO.], each Party to bear its own costs except as otherwise provided herein.

4. REPRESENTATIONS & WARRANTIES

Each Party represents and warrants to the other that, as of the Effective Date:

1. Authority. It has full power and authority to execute, deliver, and perform this Agreement.
2. No Assignment. It has not assigned or transferred, or purported to assign or transfer, to any person or entity any Claim or interest covered by this Agreement.
3. Independent Counsel. It has had the opportunity to obtain independent legal advice, understands the terms and consequences of this Agreement, and enters into it voluntarily.
4. Competency. No Party is under any disability or impairment that would render this Agreement void or voidable.
5. Medicare Status. Releasing Parties have disclosed whether they are Medicare beneficiaries; all representations in Section 7.4 are accurate.

The representations and warranties in this Section survive the execution and delivery of this Agreement.

5. COVENANTS & RESTRICTIONS

1. Confidentiality. Except as required by law or court order, the Parties agree to keep the terms and conditions of this Agreement confidential. Permitted disclosures include discussions with tax, legal, or financial advisors, insurers, or as necessary to effectuate court approval or lien resolution.
2. Non-Disparagement. Each Party agrees not to make any statement intended or reasonably likely to disparage or defame the other Party related to the Incident or this settlement.
3. Cooperation. Plaintiff shall execute all reasonable documents and take such further action as may be necessary to carry out the intent of this Agreement.
4. No Further Claims. Releasing Parties covenant not to sue the Released Parties on any Claim released herein.
5. Structured Settlement Transfer Restriction. Plaintiff may not transfer, assign, or encumber any Structured Settlement payment without complying with Alabama’s structured-settlement transfer statute and obtaining court approval.

6. DEFAULT & REMEDIES

6.1 Default by Defendant
a. Failure to pay the Settlement Amount when due constitutes a material default.
b. Upon default and after five (5) calendar days’ written notice and opportunity to cure, Plaintiff may:
i. Enforce specific performance of payment plus interest at [__] % per annum, or
ii. Rescind this Agreement and reinstate the underlying action, crediting Defendant for any partial payments made.

6.2 Default by Plaintiff
Failure to provide conditions precedent or dismissal documents within the time required constitutes a material default. After five (5) calendar days’ written notice, Defendant may declare this Agreement null and void and seek recovery of any amounts paid, plus reasonable attorney fees incurred in enforcing its rights.

6.3 Attorney Fees
In any action to enforce this Agreement, the prevailing Party is entitled to reasonable attorney fees and costs.

7. RISK ALLOCATION

7.1 Mutual Release

In consideration of the Settlement Amount:

a. Releasing Parties, on behalf of themselves and any person claiming by or through them, hereby irrevocably and unconditionally release, acquit, and forever discharge the Released Parties from any and all Claims.

b. Released Parties reciprocally release Plaintiff and Releasing Parties from any claims arising out of the Incident, including contribution and indemnity.

7.2 Limitation of Liability

The Parties’ aggregate liability for any breach of this Agreement shall not exceed the Settlement Amount, except for (i) obligations to indemnify against undisclosed Liens, or (ii) intentional misconduct.

7.3 Lien Resolution; Indemnification

a. Plaintiff is solely responsible for satisfaction and discharge of all Liens.
b. Plaintiff shall indemnify, defend, and hold harmless Released Parties from any liability, cost, or expense (including attorney fees) arising from any unresolved Lien.

7.4 Medicare Secondary Payer Compliance

a. Plaintiff affirms that [he/she] is [is / is not] a Medicare beneficiary.
b. The Parties agree to comply with the Medicare Secondary Payer Act, including Section 111 reporting obligations.
c. Plaintiff shall indemnify Released Parties against any Medicare conditional payment claims related to the Incident.

7.5 Force Majeure

Neither Party shall be liable for delay in performing under this Agreement due to events beyond its reasonable control, provided that the affected Party gives prompt notice and resumes performance as soon as practicable.

8. DISPUTE RESOLUTION

8.1 Governing Law
This Agreement is governed by and construed in accordance with the laws of the State of Alabama, without regard to its conflict-of-laws principles.

8.2 Forum Selection
The Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Alabama, for any dispute arising under or relating to this Agreement.

8.3 Arbitration
The Parties expressly agree that arbitration is NOT applicable.

8.4 Jury Waiver
[Intentionally Omitted.]

8.5 Injunctive Relief
Each Party acknowledges that a breach of Sections 5.1 or 5.2 (Confidentiality; Non-Disparagement) would cause irreparable harm for which monetary damages are inadequate and consents to the issuance of injunctive relief without the necessity of posting bond.

9. GENERAL PROVISIONS

1. Entire Agreement. This Agreement constitutes the entire understanding of the Parties and supersedes all prior negotiations and writings regarding its subject matter.
2. Amendments. No amendment or modification is effective unless in writing and signed by all Parties.
3. Waiver. Failure to enforce any provision is not a waiver of future enforcement.
4. Assignment. Neither Party may assign this Agreement without the prior written consent of the other, except that Defendant may assign its payment obligation to an insurer or annuity issuer.
5. Severability. If any provision is held invalid or unenforceable, the remaining provisions remain in full force, and the invalid provision shall be reformed to the minimum extent necessary to be enforceable.
6. Successors and Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
7. Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original, and all of which together constitute one instrument. Signatures transmitted electronically or by facsimile are deemed original.
8. Headings. Section headings are for convenience only and do not affect interpretation.
9. Interpretation. The Parties have participated equally in drafting this Agreement; no presumption against the drafter shall apply.

10. EXECUTION BLOCK

IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.

[// GUIDANCE: Insert additional signature lines if multiple plaintiffs/defendants or if parental/guardian signatures are required for a Minor. Alabama notarial acknowledgment is recommended; include below if desired.]

OPTIONAL NOTARIAL ACKNOWLEDGMENT (Alabama)

State of Alabama )
County of [_____ ])

On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally appeared [SIGNATORY NAME], proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to this instrument, and acknowledged that he/she executed the same for the purposes therein contained.

IN WITNESS WHEREOF, I hereunto set my hand and official seal.

Notary Public
My Commission Expires: ____

[// GUIDANCE:
1. Minor Settlements – Alabama law generally requires court approval for settlements involving a Minor. Attach petition and proposed order if applicable.
2. Structured Settlements – Ensure compliance with Alabama’s Structured Settlement Protection Act and federal tax requirements (I.R.C. § 104(a)(2), § 130).
3. Medicare / Medicaid – Confirm conditional payments, obtain CMS final demand, and consider a Medicare Set-Aside if indicated.
4. Liens – Obtain written lien satisfactions before distribution of funds.
5. Tax Disclaimer – Advise clients to consult tax counsel regarding settlement-proceeds characterization.
]