PERSONAL INJURY SETTLEMENT AGREEMENT
(Mutual Release & [Optional] Structured Settlement)
State of California
[// GUIDANCE: This template is drafted for use in California personal-injury matters, including adult and minor claimants. Customize all bracketed items and delete any provisions that are inapplicable to the specific matter.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Settlement Consideration
- Mutual Release of Claims
- Representations & Warranties
- Covenants & Continuing Obligations
- Default; Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Minor’s Compromise & Court Approval (if applicable)
- Execution Block
1. DOCUMENT HEADER
1.1 Effective Date. This Personal Injury Settlement Agreement and Mutual Release (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”).
1.2 Parties.
a. “[CLAIMANT]” means [FULL LEGAL NAME OF INJURED PARTY], [individual | minor by and through court-appointed guardian ad litem [GUARDIAN NAME]], whose address is [ADDRESS].
b. “[DEFENDANT]” means [FULL LEGAL NAME], a [ENTITY TYPE, e.g., California corporation] with its principal place of business at [ADDRESS].
1.3 Recitals.
a. An incident occurring on or about [DATE OF INCIDENT] at [LOCATION] allegedly caused personal injuries to Claimant (the “Incident”).
b. The Parties desire to fully and finally compromise, settle, and release all claims arising out of or relating to the Incident on the terms set forth herein.
c. In consideration of the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows.
2. DEFINITIONS
Capitalized terms have the meanings set forth below or elsewhere in this Agreement:
“Agreement” has the meaning set forth in Section 1.1.
“Claim(s)” means any and all past, present, or future claims, demands, causes of action, damages, losses, costs, expenses, liens, or obligations of whatever kind or nature, whether known or unknown, suspected or unsuspected, that the Releasing Party may have against the Released Party arising out of or relating to the Incident.
“Confidential Information” means the terms of this Agreement and all settlement communications, except to the extent disclosure is required by law or court order.
“Effective Date” has the meaning set forth in Section 1.1.
“Incident” has the meaning set forth in Section 1.3(a).
“Parties” means Claimant and Defendant collectively; “Party” means either of them individually.
“Released Parties” and “Releasing Parties” have the meanings assigned in Section 4.1.
“Settlement Amount” means the consideration described in Section 3.1.
“Structured Settlement” means the periodic-payment arrangement, if any, described in Section 3.2.
3. SETTLEMENT CONSIDERATION
3.1 Lump-Sum Payment. Within [NUMBER] business days after the later of (i) full execution of this Agreement or (ii) entry of a final, non-appealable order approving this Agreement under Section 11 (if applicable), Defendant shall pay Claimant the total sum of [SETTLEMENT AMOUNT IN WORDS] USD ($[NUMERALS]) (the “Settlement Amount”) by [wire transfer | cashier’s check] payable to [PAYEE].
3.2 Structured Settlement (Optional).
a. Election. If the Parties have agreed to a structured settlement, the Settlement Amount shall be funded in the form of periodic payments according to the schedule attached as Exhibit A (the “Structured Settlement”).
b. Qualified Assignment. The Parties intend that any structured payments qualify for tax exclusion under I.R.C. § 104(a)(2) and comply with applicable California structured-settlement protection laws. Defendant may assign its obligation to make periodic payments to a qualified assignee, and Claimant shall look solely to the assignee and the annuity issuer for such payments.
c. Anti-Transfer. Claimant shall not sell, assign, or otherwise transfer the periodic payments except as permitted by California Structured Settlement Protection statutes after obtaining a final court order approving the transfer.
3.3 Lien Resolution. Claimant is solely responsible for resolving and satisfying any medical, government, or third-party liens arising from the Incident. Defendant may, at its option, condition payment on reasonable evidence that all such liens have been resolved or will be satisfied out of the Settlement Amount.
3.4 No Admission of Liability. Payment of the Settlement Amount is a compromise of disputed claims and shall not be construed as an admission of liability, fault, or wrongdoing by any Party.
4. MUTUAL RELEASE OF CLAIMS
4.1 Release. Upon receipt of the Settlement Amount (or first periodic payment under Section 3.2, as applicable), each Party (the “Releasing Party”) irrevocably releases and forever discharges the other Party and its past, present, and future parents, subsidiaries, affiliates, officers, directors, shareholders, members, managers, employees, insurers, reinsurers, attorneys, agents, predecessors, and successors (collectively, the “Released Party”) from any and all Claims.
4.2 California Civil Code § 1542 Waiver.
The Parties expressly waive the provisions of California Civil Code section 1542, which states:
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release, and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.”
Each Party understands and acknowledges the significance and consequence of this specific waiver of Section 1542.
4.3 Indemnity by Releasing Party. Each Releasing Party agrees to defend, indemnify, and hold harmless the Released Party from any claims brought by any governmental agency, insurer, or other third party seeking recovery of sums paid to or on behalf of the Releasing Party in connection with the Incident, except to the extent arising from the Released Party’s breach of this Agreement.
4.4 Survival. This Article 4 survives the Effective Date and is independent of any court approval under Article 11.
5. REPRESENTATIONS & WARRANTIES
5.1 Mutual Representations. Each Party represents and warrants that:
a. Authority. It has full legal right, power, and authority to enter into and perform this Agreement.
b. No Assignment. It has not assigned or transferred any Claim released herein.
c. Legal Counsel. It has had the opportunity to consult independent counsel of its choice and is not relying on any representation of the other Party not expressly set forth herein.
d. No Reliance. It has made its own investigation of the facts and law pertaining to the Incident and this settlement.
5.2 Claimant-Specific Representations. Claimant (and, if applicable, Claimant’s guardian ad litem) further represents that:
a. Medical Condition. Claimant has disclosed all known medical conditions and treatment related to the Incident.
b. Medicare/Medicaid. Claimant will fully comply with any Medicare Secondary Payer Act reporting or reimbursement obligations.
5.3 Disclaimer of Warranties. Except as expressly provided, the Parties disclaim all warranties, express or implied, including any warranty of fitness for a particular purpose.
5.4 Survival. The representations and warranties in this Article 5 survive the Effective Date.
6. COVENANTS & CONTINUING OBLIGATIONS
6.1 Confidentiality. The Parties shall keep the terms of this Agreement and all settlement negotiations strictly confidential, except as required (i) for tax, accounting, or legal advice; (ii) by court order; or (iii) by applicable law.
6.2 Non-Disparagement. Each Party agrees not to make or publish any statement that disparages the other Party in connection with the Incident or this Agreement.
6.3 Cooperation. The Parties shall execute any additional documents and take any actions reasonably necessary to effectuate the purposes of this Agreement, including structured-settlement assignment documents.
6.4 Notice of Breach. A Party alleging breach shall provide written notice to the alleged breaching Party, specifying the nature of the breach and providing [30] days to cure.
7. DEFAULT; REMEDIES
7.1 Event of Default. A Party is in default if it fails to perform any material obligation under this Agreement within the applicable time period and fails to cure within the period stated in Section 6.4.
7.2 Remedies. Upon default, the non-breaching Party may:
a. Obtain specific performance or injunctive relief;
b. Seek monetary damages, including repayment of any portion of the Settlement Amount already paid or received; and
c. Recover reasonable attorneys’ fees and costs incurred in enforcing this Agreement.
7.3 Limitation on Damages. Except for willful misconduct or breach of confidentiality, neither Party shall be liable for consequential, incidental, or punitive damages.
8. RISK ALLOCATION
8.1 Mutual Release. Risk is allocated as set forth in Article 4; there is no separate indemnity beyond Section 4.3.
8.2 Insurance. Defendant represents that it (or its insurer) will fund the Settlement Amount; no further insurance is required of Claimant.
8.3 Force Majeure. Neither Party shall be liable for failure to perform caused by events beyond its reasonable control, excluding payment obligations.
9. DISPUTE RESOLUTION
9.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by the tort and contract laws of the State of California, without regard to conflict-of-laws principles.
9.2 Forum Selection. The state courts located in [COUNTY], California shall have exclusive jurisdiction. Each Party irrevocably submits to such courts and waives any objection based on inconvenient forum.
9.3 Arbitration & Jury Waiver. The Parties expressly decline arbitration and waive any demand therefor. The Parties do not waive the right to a jury trial.
10. GENERAL PROVISIONS
10.1 Amendment; Waiver. No amendment or waiver of any provision is effective unless in a writing signed by all Parties.
10.2 Assignment. No Party may assign this Agreement without the prior written consent of the other Party, except that Defendant may assign its structured-settlement obligations under Section 3.2(b).
10.3 Successors & Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
10.4 Severability. If any provision is held unenforceable, the remaining provisions shall remain in full force, and the unenforceable provision shall be interpreted to best effectuate the Parties’ intent.
10.5 Entire Agreement. This Agreement constitutes the full and final understanding of the Parties regarding the subject matter and supersedes all prior agreements or negotiations.
10.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is deemed an original. Signatures delivered by electronic means shall be deemed original signatures.
11. MINOR’S COMPROMISE & COURT APPROVAL (If Applicable)
11.1 Guardian ad Litem. If Claimant is a minor, [NAME] is appointed or confirmed as guardian ad litem pursuant to California law to represent the minor’s interests in this settlement.
11.2 Petition for Approval. The Parties shall promptly submit a Petition for Approval of Compromise of Minor’s Claim to the [SUPERIOR COURT, COUNTY] and shall cooperate to obtain a final, non-appealable order approving this Agreement.
11.3 Deposit or Annuity. Any funds allocated to a minor Claimant shall be disbursed as ordered by the court, including deposit into a blocked account or funding of an annuity, as reflected in the court’s order.
11.4 Condition Precedent. As to a minor Claimant, court approval is a condition precedent to the enforceability of this Agreement. If approval is denied, this Agreement shall be null and void, and no consideration shall be due unless the Parties otherwise agree in writing.
[// GUIDANCE: Delete Article 11 if no minor is involved.]
12. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have caused this Agreement to be executed as of the Effective Date.
CLAIMANT
By: _____
Name: ____
Date: ____
[If minor:]
Guardian ad Litem: ____
DEFENDANT
By: _____
Name: ____
Title: ____
Date: ____
[Optional Notary Acknowledgment / Witness Lines per local practice]
[// GUIDANCE: Attach exhibits as needed (e.g., Structured Settlement Payment Schedule, Lien Resolution Statement).]
© [YEAR] [LAW FIRM NAME]. All rights reserved. Template provided for professional use; customize before deployment.