PERSONAL INJURY SETTLEMENT AGREEMENT
(Illinois – Governed by Illinois State Tort Law)
[// GUIDANCE: Insert all bracketed items before execution. This template is intended for use in Illinois personal-injury matters only. Verify county-specific filing requirements, especially for minor settlements.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Payment of Settlement Proceeds
- Mutual Release of Claims
- Representations & Warranties
- Covenants & Additional Agreements
- Default; Remedies
- Risk Allocation
- Dispute Resolution & Governing Law
- General Provisions
- Execution Block
1. DOCUMENT HEADER
Personal Injury Settlement Agreement and Mutual Release (the “Agreement”) made and entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
Claimant: [CLAIMANT NAME], an individual with an address at [ADDRESS] (“Claimant”),
and
Released Parties: [DEFENDANT NAME], a [STATE] [ENTITY TYPE] with its principal place of business at [ADDRESS], together with its past, present, and future parents, subsidiaries, affiliates, officers, directors, shareholders, employees, insurers, reinsurers, agents, attorneys, successors, and assigns (collectively, “Released Parties”).
Recitals
A. An incident occurring on or about [DATE OF ACCIDENT] in [LOCATION] allegedly caused Claimant to suffer personal injuries and other damages (the “Incident”).
B. Claimant has asserted claims against Released Parties arising out of or related to the Incident (the “Claims”), which are or may be the subject of [CASE CAPTION / COURT & DOCKET NO.] (the “Action”).
C. Without admitting liability, the Parties desire to fully and finally settle all Claims upon the terms set forth herein, in compliance with 735 ILCS 5/2-2301 and other applicable Illinois law.
NOW, THEREFORE, in consideration of the mutual covenants herein and for other good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, capitalized terms have the meanings set forth below; terms defined in a Section shall have that meaning throughout.
“Agreement” has the meaning set forth in the preamble.
“Claim(s)” means any and all past, present, or future claims, demands, causes of action, suits, obligations, damages, losses, costs, expenses, liens, and liabilities of every kind whatsoever, whether known or unknown, in law or equity, arising out of or relating to the Incident.
“Effective Date” means the date first written above.
“Liens” means any healthcare, governmental, attorney, subrogation, workers’ compensation, or other lien or right of reimbursement arising out of payments made or to be made on Claimant’s behalf in connection with the Incident.
“Settlement Amount” means the gross sum of [SETTLEMENT AMOUNT IN WORDS] Dollars (US $[AMOUNT]), payable in accordance with Section 3.
“Structured Settlement” means the periodic-payment arrangement, if any, described in Section 3.2.
[// GUIDANCE: Add additional defined terms (e.g., “Minor,” “Guardian ad Litem”) as needed.]
3. PAYMENT OF SETTLEMENT PROCEEDS
3.1 Lump-Sum Payment. Released Parties shall deliver the Settlement Amount to Claimant (or to Claimant’s counsel IOLTA account) within thirty (30) days after (a) receipt of an executed counterpart of this Agreement and (b) entry of a dismissal order with prejudice in the Action, in conformity with 735 ILCS 5/2-2301(d).
3.2 Structured Settlement (If Applicable).
(a) Description. [Insert annuity issuer] shall fund periodic payments to Claimant according to the schedule in Exhibit A.
(b) Qualified Assignment. The Parties intend any periodic payments to constitute a “qualified assignment” under 26 U.S.C. §130. Claimant shall execute all documents reasonably required to consummate such assignment.
(c) Non-Transferability. Periodic payments shall be non-assignable except as permitted by the Illinois Structured Settlement Annuity Payment Rights Act, 215 ILCS 153/1 et seq.
3.3 Liens & Medicare Set-Aside.
(a) Claimant shall be solely responsible for satisfaction of all Liens.
(b) Claimant represents no conditional Medicare payments have been made; alternatively, Claimant shall establish and administer any Medicare Set-Aside arrangement required by 42 U.S.C. §1395y(b).
3.4 Court Approval for Minor/Incapacitated Claimant.
(a) If Claimant is a minor or incapacitated person, this Agreement is contingent upon approval by the appropriate Illinois court pursuant to 755 ILCS 5/19-8.
(b) The Parties shall cooperate in securing such approval; failure to secure approval within [90] days shall render this Agreement voidable at the option of either Party.
4. MUTUAL RELEASE OF CLAIMS
4.1 Release by Claimant. Effective upon receipt of the Settlement Amount (or first periodic payment, as applicable), Claimant irrevocably releases and forever discharges the Released Parties from any and all Claims, whether asserted or unasserted, known or unknown, including but not limited to claims for bodily injury, property damage, medical expenses, lost wages, loss of consortium, punitive damages, and attorneys’ fees, arising out of or relating to the Incident.
4.2 Release by Released Parties. Upon the Effective Date, Released Parties release Claimant from any claim for contribution, indemnity, or reimbursement arising out of the Incident, except for obligations expressly created by this Agreement.
4.3 Illinois Releasing-Instrument Requirements. The Parties acknowledge this mutual release complies with Illinois public-policy requirements for release enforceability. The language herein is intended to be comprehensive and to satisfy the standards articulated in the Illinois Supreme Court’s decisions governing broad personal-injury releases.
4.4 No Admission of Liability. This Agreement is a compromise of disputed claims; nothing herein shall be construed as an admission of liability or wrongdoing by any Party.
4.5 Unknown Claims – 740 ILCS 175/4(f). Each Party waives any right that an unknown or later-discovered fact would affect its decision to enter into this Agreement.
5. REPRESENTATIONS & WARRANTIES
5.1 Mutual Authority. Each Party represents it has full legal authority to execute, deliver, and perform this Agreement and that no further consent or approval is required.
5.2 Capacity. Claimant represents that (check one):
☐ Claimant is at least eighteen (18) years of age and competent.
☐ Claimant is a minor/incompetent person, and the individual executing on Claimant’s behalf is duly appointed guardian [attach court order].
5.3 Liens. Claimant represents that all Liens disclosed on Exhibit B are accurate and complete.
5.4 Tax Matters. Parties make no representation regarding tax consequences; Claimant has consulted, or had the opportunity to consult, an independent tax adviser.
5.5 Survival. The representations and warranties herein survive the execution and performance of this Agreement.
6. COVENANTS & ADDITIONAL AGREEMENTS
6.1 Dismissal of Action. Within five (5) business days after receipt of the Settlement Amount, Claimant shall file a stipulation dismissing the Action with prejudice, with each Party to bear its own costs.
6.2 Non-Disparagement & Confidentiality.
(a) Confidentiality. The Parties agree to maintain the terms of this Agreement in strict confidence except (i) as required by law or court order; (ii) to tax advisers, insurers, or auditors bound by the same confidentiality; or (iii) to enforce this Agreement.
(b) Non-Disparagement. The Parties shall not make any statement intended to harm the other’s reputation in connection with the Incident.
6.3 Cooperation. The Parties shall execute any additional documents reasonably necessary to effectuate the purposes of this Agreement.
7. DEFAULT; REMEDIES
7.1 Events of Default. A Party’s failure to perform any material obligation under this Agreement within ten (10) days after receipt of written notice constitutes an “Event of Default.”
7.2 Cure Period. The defaulting Party shall have ten (10) days after receipt of notice to cure an Event of Default before the non-defaulting Party may commence enforcement.
7.3 Remedies. Upon an uncured Event of Default, the non-defaulting Party may (a) obtain specific performance; (b) recover any unpaid Settlement Amount plus interest at [X]% per annum; and/or (c) recover reasonable attorneys’ fees and costs incurred in enforcement.
[// GUIDANCE: Consider escalating remedies (e.g., confession of judgment) if permissible and desirable.]
8. RISK ALLOCATION
8.1 Indemnification for Liens. Claimant shall indemnify, defend, and hold harmless Released Parties from any liability arising out of Liens not satisfied by Claimant.
8.2 Limitation of Liability. The total monetary liability of Released Parties under this Agreement shall not exceed the Settlement Amount.
8.3 Force Majeure. No Party shall be liable for delay or failure in performance caused by events beyond its reasonable control, provided it gives prompt written notice and resumes performance as soon as practicable.
9. DISPUTE RESOLUTION & GOVERNING LAW
9.1 Governing Law. This Agreement and any dispute arising hereunder shall be governed by and construed in accordance with the laws of the State of Illinois, without regard to its conflict-of-laws principles.
9.2 Forum Selection. The Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY], Illinois for any suit, action, or proceeding arising out of or relating to this Agreement.
9.3 Jury Trial Waiver. NOT APPLICABLE. (The Parties do not waive jury trial rights.)
9.4 Arbitration. NOT APPLICABLE. (No arbitration clause.)
10. GENERAL PROVISIONS
10.1 Entire Agreement; Integration. This Agreement constitutes the entire agreement among the Parties and supersedes all prior or contemporaneous understandings regarding its subject matter.
10.2 Amendments and Waivers. No amendment or waiver is effective unless in a writing signed by all Parties. A waiver on one occasion is not a waiver on any future occasion.
10.3 Assignment. No Party may assign or delegate its rights or obligations without the prior written consent of the other Party, except that Released Parties may assign rights to insurers.
10.4 Successors & Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
10.5 Severability. Any invalid provision shall be severed and the remainder enforced to the maximum extent permissible.
10.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which is an original and together constitute one instrument. Signatures transmitted electronically (e.g., PDF, DocuSign) are deemed originals.
10.7 Headings. Headings are for convenience only and do not affect interpretation.
10.8 Costs and Fees. Except as otherwise provided, each Party shall bear its own attorneys’ fees and costs.
11. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
CLAIMANT
Signature: _____
Print Name: ____
Date: ______
[If minor/incapacitated:]
Signature of [GUARDIAN NAME], as Court-Appointed Guardian of [CLAIMANT]
Date: ______
[DEFENDANT NAME]
By: _____
Name: _____
Title: _____
Date: ______
[// GUIDANCE: Notarization is optional in Illinois for releases but may assist enforceability. Attach jurat if desired.]
EXHIBIT A
Structured Settlement Payment Schedule
[Insert annuity payment dates, amounts, and guaranteed periods]
EXHIBIT B
Schedule of Disclosed Liens
[Insert lienholder name, amount claimed, status of satisfaction]
[// GUIDANCE: File motion for good-faith settlement determination if co-defendants exist (contribution-bar protection under 740 ILCS 100/2).]