PERSONAL INJURY SETTLEMENT AGREEMENT AND MUTUAL RELEASE
(North Carolina – Governed by State Tort Law)
[// GUIDANCE: This template is drafted to satisfy North Carolina requirements, including release enforceability, minor‐settlement court approval, and optional structured-settlement provisions. Bracketed items must be customized. Delete any bracketed language that does not apply.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
- Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Parties. This Personal Injury Settlement Agreement and Mutual Release (the “Agreement”) is entered into by and between [CLAIMANT FULL LEGAL NAME], residing at [CLAIMANT ADDRESS] (together with all Releasing Parties, the “Claimant”), and [DEFENDANT FULL LEGAL NAME], with principal address at [DEFENDANT ADDRESS] (together with all Released Parties, the “Defendant”).
1.2 Recitals.
A. A dispute arose out of an incident occurring on [DATE OF INCIDENT] in [CITY/COUNTY], North Carolina, resulting in alleged personal injuries to Claimant (the “Action”).
B. The Parties desire fully and finally to resolve the Action without admission of liability and to avoid the costs and uncertainties of continued litigation.
C. In consideration of the mutual promises herein, and for other good and valuable consideration, the sufficiency of which is acknowledged, the Parties agree as follows.
1.3 Effective Date. This Agreement is effective on the later of (i) the date last signed below, or (ii) the date of entry of an order approving the settlement, if court approval is required under Section 3.4 (the “Effective Date”).
1.4 Governing Jurisdiction. This Agreement is governed by the substantive laws of the State of North Carolina, without regard to its conflict-of-laws rules.
2. DEFINITIONS
For ease of reference, the following capitalized terms are used throughout this Agreement:
“Action” has the meaning set forth in Recital A.
“Court” means the General Court of Justice, [Superior/District] Court Division, [COUNTY] County, North Carolina.
“Minor” means a natural person under eighteen (18) years of age.
“Minor’s Representative” means the duly appointed guardian, guardian ad litem, or other fiduciary authorized by the Court to act for a Minor.
“Released Claims” has the meaning provided in Section 7.1.
“Released Parties” means Defendant, its past and present parents, subsidiaries, affiliates, insurers, reinsurers, officers, directors, employees, agents, attorneys, successors, and assigns.
“Releasing Parties” means Claimant, Claimant’s heirs, executors, administrators, representatives, successors, and assigns.
“Settlement Amount” means the total consideration identified in Section 3.1.
“Structured Settlement” means the periodic-payment arrangement, if elected under Section 3.2.
[// GUIDANCE: Add or delete defined terms as needed. Keep alphabetical order.]
3. OPERATIVE PROVISIONS
3.1 Payment of Settlement Amount.
(a) Cash Component. Defendant shall pay [US$ __] (“Cash Component”) to Claimant (or to the trust or Clerk of Court as applicable) within [__] days after the Effective Date.
(b) Consideration for Fees & Costs. The Cash Component includes any and all claims for attorneys’ fees, litigation expenses, medical liens, and subrogation interests unless otherwise identified in Exhibit A.
3.2 Structured Settlement Election (Optional).
(a) If the Parties elect a Structured Settlement, Defendant (or its insurer) shall purchase an annuity contract issued by a qualified life-insurance company providing periodic payments as set forth in Schedule 1 (the “Periodic Payments”).
(b) The Structured Settlement shall comply with North Carolina’s Structured Settlement Protection Act, N.C. Gen. Stat. §§ 1-543.10 et seq.
(c) Title to the annuity shall vest solely in the qualified assignee; Claimant shall have no right to accelerate, defer, increase, or decrease the Periodic Payments.
[// GUIDANCE: Delete Section 3.2 entirely if the settlement is lump-sum only.]
3.3 Conditions Precedent. Defendant’s obligation to fund the Settlement Amount is conditioned on:
(i) Claimant’s execution and delivery of this Agreement and any ancillary documents (e.g., lien satisfactions);
(ii) Receipt of all necessary consents under Section 3.4 (Minor Settlement Approval); and
(iii) Delivery of a duly completed IRS Form W-9 for each payee.
3.4 Minor Settlement Approval. If any Releasing Party is a Minor:
(a) Court Approval. The settlement is subject to Court approval pursuant to N.C. Gen. Stat. § 1-402 and applicable Rules of Civil Procedure.
(b) Appointment of Representative. Claimant shall promptly petition for appointment of a Minor’s Representative if none exists.
(c) Deposit of Funds. Cash payable to or for the benefit of a Minor in excess of US$5,000 shall be (i) deposited in a federally insured interest-bearing account restricted until the Minor reaches majority; or (ii) structured pursuant to Section 3.2; or (iii) otherwise handled as ordered by the Court.
(d) Failure of Approval. If the Court declines to approve the settlement, this Agreement is void ab initio and all rights of the Parties are restored.
3.5 Taxes. The Parties acknowledge that personal-injury recoveries for physical injuries are generally excludable from gross income under I.R.C. § 104(a)(2); however, Claimant is solely responsible for any tax consequences. No Party provides tax advice.
4. REPRESENTATIONS & WARRANTIES
4.1 Mutual Representations. Each Party represents and warrants that:
(a) Capacity. It has full legal right, power, and authority to execute and perform this Agreement.
(b) No Assignment. It has not assigned or transferred any interest in the Action or the Released Claims.
(c) Independent Advice. It has had the opportunity to consult with counsel of its choosing.
4.2 Claimant’s Additional Representations.
(a) Liens. Except as disclosed in Exhibit A, Claimant has no outstanding medical, governmental, or subrogation liens related to the Action.
(b) Accuracy of Information. All information provided to Defendant for settlement evaluation is true and complete in all material respects.
4.3 Survival. The representations and warranties survive the Effective Date for a period of two (2) years.
5. COVENANTS & RESTRICTIONS
5.1 Lien Resolution. Claimant shall satisfy or properly resolve all liens identified in Exhibit A within sixty (60) days after receipt of the Settlement Amount and shall indemnify Defendant against any related claims.
5.2 Confidentiality (Optional). Except as required by law or court order, the Parties shall keep the terms of this Agreement confidential.
[// GUIDANCE: Remove confidentiality if public disclosure is mandated (e.g., for minor settlements).]
5.3 Non-Disparagement (Optional). The Parties shall refrain from making statements intended to discredit or malign the other concerning matters released herein.
5.4 Cooperation. The Parties shall cooperate in executing additional documents reasonably necessary to effectuate this Agreement.
6. DEFAULT & REMEDIES
6.1 Events of Default.
(a) Payment Default. Failure of Defendant to pay any amount when due.
(b) Breach of Covenants. Material breach of Sections 5.1–5.4.
6.2 Notice and Cure. The non-defaulting Party shall give written notice specifying the default; the defaulting Party has ten (10) business days to cure, except that payment default must be cured within five (5) business days.
6.3 Remedies. If uncured, the non-defaulting Party may:
(i) Seek specific performance;
(ii) Obtain judgment for unpaid amounts plus 8% per annum interest from the due date; and/or
(iii) Recover reasonable attorneys’ fees and costs incurred in enforcement.
7. RISK ALLOCATION
7.1 Mutual Release. Upon receipt of the Settlement Amount, Claimant, on behalf of all Releasing Parties, fully and forever releases and discharges all Released Parties from any and all claims, demands, causes of action, damages, or liabilities, whether known or unknown, suspected or unsuspected, that (i) arise out of or relate to the Action or the incident described in Recital A, and (ii) exist as of the Effective Date (collectively, the “Released Claims”).
7.2 Waiver of Unknown Claims. Claimant acknowledges the possibility of unknown or unanticipated injuries or damages and expressly waives any rights under laws that might otherwise preclude release of such claims.
7.3 Indemnification by Claimant. Claimant shall defend, indemnify, and hold harmless Released Parties from any third-party claim arising out of any lien or subrogation interest not disclosed in Exhibit A.
7.4 Limitation of Liability. Except for obligations expressly stated herein, the liability of each Party is limited to the Settlement Amount.
7.5 No Admission. This Agreement constitutes a compromise settlement; nothing herein is an admission of liability.
7.6 Force Majeure. No Party is liable for delay caused by events beyond its reasonable control (e.g., natural disasters, acts of terror, bank failures), provided it acts diligently to perform thereafter.
8. DISPUTE RESOLUTION
8.1 Governing Law. North Carolina substantive law governs all disputes arising out of or relating to this Agreement.
8.2 Exclusive Forum. The Parties irrevocably submit to the exclusive jurisdiction of the state courts located in [COUNTY] County, North Carolina, and waive any objection to venue or forum non conveniens.
8.3 Waiver of Jury Trial. [NOT APPLICABLE PER METADATA—DELETE IF NOT USED.]
8.4 Arbitration. [NOT APPLICABLE PER METADATA—DELETE IF NOT USED.]
9. GENERAL PROVISIONS
9.1 Entire Agreement. This Agreement, including all exhibits and schedules, constitutes the entire understanding and supersedes all prior negotiations.
9.2 Amendments. No amendment or waiver is effective unless in writing and signed by all Parties or their authorized representatives.
9.3 Severability. If any provision is held unenforceable, it shall be reformed to the minimum extent necessary, and the remainder shall continue in full force.
9.4 Assignment. No Party may assign its rights or obligations without prior written consent of the other Party, except that Defendant may assign to an insurer or structured-settlement obligor.
9.5 Successors and Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
9.6 Counterparts; Electronic Signatures. The Agreement may be executed in counterparts, each of which is deemed an original, and signatures transmitted electronically or by DocuSign® are effective.
9.7 Headings. Headings are for convenience only and do not affect interpretation.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Personal Injury Settlement Agreement and Mutual Release as of the dates set forth below.
| CLAIMANT | DEFENDANT | |
|---|---|---|
| _________ | Date: ______ | _________ |
| [CLAIMANT NAME] | [DEFENDANT NAME & TITLE] |
[If Minor:]
Approved and consented to:
[NAME OF MINOR’S REPRESENTATIVE], as [Guardian/Guardian ad litem] for [MINOR NAME]
Date: ______
[Optional Notary Block – required if Court order mandates notarization]
COURT APPROVAL (If Required)
Pursuant to N.C. Gen. Stat. § 1-402, the undersigned Judge hereby approves the foregoing settlement as fair, reasonable, and in the best interests of the Minor.
Judge Presiding
Date: ______
EXHIBIT A – LIEN SCHEDULE
[List of all liens, claim amounts, and resolution method]
SCHEDULE 1 – STRUCTURED SETTLEMENT PAYMENT TERMS
[If elected, set forth annuity issuer, payment amounts, commencement dates, and guaranteed periods.]
[// GUIDANCE: Review local rules for any additional filing, certification, or approval requirements before finalizing this Agreement.]