PERSONAL INJURY SETTLEMENT AGREEMENT
(Commonwealth of Pennsylvania – Court-Ready Template)
[// GUIDANCE: Replace every bracketed, bold-capitalized item (e.g., [CLAIMANT NAME]) with matter-specific information and delete this guidance before execution.]
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 Title and Parties
This Personal Injury Settlement Agreement and Mutual Release (this “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
a. [CLAIMANT NAME], [individual | minor | estate of _____], residing at [ADDRESS] (“Claimant”); and
b. [DEFENDANT NAME], a [corporation | limited liability company | individual] organized under the laws of [STATE] with its principal place of business at [ADDRESS] (“Defendant”).
Claimant and Defendant are each a “Party” and, collectively, the “Parties.”
1.2 Recitals
A. Claimant alleges personal injuries arising from an incident occurring on or about [DATE OF INCIDENT] in [LOCATION] (the “Incident”).
B. Claimant has asserted, or could assert, claims against Defendant arising out of the Incident (the “Claims”), which Defendant expressly denies.
C. The Parties desire to fully and finally resolve all Claims on the terms set forth herein in exchange for the consideration described below, without admission of liability.
1.3 Governing Jurisdiction
This Agreement shall be governed by, construed, and enforced in accordance with the substantive laws of the Commonwealth of Pennsylvania, without regard to conflict-of-law principles.
2. DEFINITIONS
For purposes of this Agreement, the following terms have the meanings set forth below. Any term not defined herein shall have its plain-language meaning in the context used.
“Action” means any current or future civil action, claim, lawsuit, arbitration, administrative proceeding, or other adversarial process arising from the Incident.
“Affiliate” means, with respect to any entity, any person or entity controlling, controlled by, or under common control with such entity.
“Confidential Information” has the meaning set forth in Section 5.3.
“Court Approval” means any approval, compromise, or settlement order required under applicable Pennsylvania procedural rules or statutes, including approval of a minor’s settlement.
“Effective Date” has the meaning set forth in Section 1.1.
“Liens” means any and all asserted or unasserted healthcare reimbursement claims, statutory repayment obligations (including but not limited to Medicare, Medicaid, ERISA, workers’ compensation, or Veterans’ Administration liens), attorney charging liens, and any other third-party interest arising from medical treatment of Claimant.
“Minor” means an individual who has not reached the age of eighteen (18) years as of the Effective Date.
“Released Parties” means Defendant, its past, present, and future parents, subsidiaries, Affiliates, insurers, reinsurers, officers, directors, managers, shareholders, partners, members, employees, agents, representatives, predecessors, successors, and assigns.
“Settlement Amount” means the total monetary consideration described in Section 3.1.
“Structured Settlement” means a series of periodic payments purchased through an annuity or other lawful structure pursuant to Section 3.2.2.
[// GUIDANCE: Add or remove defined terms to suit the transaction, ensuring internal consistency.]
3. OPERATIVE PROVISIONS
3.1 Payment of Settlement Amount
3.1.1 In full, final, and complete settlement of the Claims, Defendant shall pay Claimant the sum of [“$_ (_ dollars)”] (the “Settlement Amount”) in accordance with the schedule set forth in Section 3.2.
3.1.2 The Settlement Amount constitutes the sole consideration for this Agreement and is inclusive of all damages, costs, expenses, attorneys’ fees, interest, and Liens of any kind.
3.2 Manner of Payment
3.2.1 Lump-Sum Option. Unless the Parties elect subsection 3.2.2, Defendant shall pay the Settlement Amount by wire transfer or certified funds to [PAYEE NAME/ESCROW AGENT] within [___] business days after (i) execution of this Agreement by all Parties, (ii) delivery of a duly executed IRS Form W-9 from Claimant (or guardian/conservator), and (iii) receipt of any required Court Approval.
3.2.2 Structured Settlement Option. If the Parties agree to a Structured Settlement:
a. Funding. Defendant shall, within [___] business days after satisfaction of the conditions in Section 3.2.1, purchase an annuity contract issued by [QUALIFIED LIFE INSURER] providing for periodic payments to Claimant (or a qualified assignee) as detailed in Exhibit A.
b. Compliance. Any Structured Settlement shall comply with Pennsylvania’s Structured Settlement Protection Act and the Internal Revenue Code §§ 104 and 130, as amended.
c. Assignment. Defendant may assign its liability to make periodic payments to a qualified assignee, provided that Claimant’s rights against the assignee are no less secure than against Defendant.
[// GUIDANCE: For Minors, consider court-approved restricted accounts or annuities; tie to Rule 2039 approval without citing if uncertain.]
3.3 Conditions Precedent
Payment of the Settlement Amount is conditioned upon:
a. Execution and delivery of this Agreement and any ancillary documents (including guardianship affidavits, if applicable);
b. Receipt of all necessary Court Approvals, including approval of a minor’s compromise where Claimant is a Minor;
c. Tender of any existing complaint withdrawal or stipulation of dismissal with prejudice, each Party to bear its own costs.
3.4 Tax Allocation
The Settlement Amount is allocated entirely to compensation for personal physical injuries or physical sickness within the meaning of Internal Revenue Code § 104(a)(2), except to the extent Claimant allocates a portion to punitive damages or interest in Section 3.5. Claimant acknowledges that no Party provides tax advice, and Claimant has been advised to consult independent tax counsel.
3.5 Medicare/Medicaid Compliance
Claimant represents that (i) Claimant has disclosed any entitlement to Medicare or Medicaid benefits, (ii) the Settlement Amount fully satisfies any conditional payment obligations under the Medicare Secondary Payer Act, and (iii) Claimant will timely satisfy and obtain final demand statements and issue payments to the Centers for Medicare & Medicaid Services (“CMS”) as required.
4. REPRESENTATIONS & WARRANTIES
Each Party represents and warrants to the other that:
4.1 Authority. It has full authority to execute, deliver, and perform this Agreement. If Claimant is a Minor or otherwise lacks legal capacity, the undersigned natural guardian, guardian ad litem, or court-appointed fiduciary represents that such person has full power to bind Claimant, subject to Court Approval.
4.2 No Assignment. No Claim has been assigned, conveyed, or otherwise transferred, in whole or in part, to any third party.
4.3 Independent Counsel. Each Party has had the opportunity to seek independent legal and tax advice regarding this Agreement and enters into it voluntarily.
4.4 No Reliance. No Party is relying upon any statement or representation not expressly set forth in this Agreement.
The representations and warranties herein shall survive the Effective Date.
5. COVENANTS & RESTRICTIONS
5.1 Mutual Release. Subject to payment of the Settlement Amount, Claimant, on behalf of Claimant and Claimant’s heirs, executors, administrators, successors, and assigns, irrevocably and unconditionally releases and forever discharges the Released Parties from any and all past, present, or future Claims, whether known or unknown, arising out of or related to the Incident.
5.1.1 Reciprocal Release. Defendant releases Claimant from all claims arising out of the Incident, except enforcement of this Agreement.
5.2 Covenant Not to Sue. Claimant covenants that neither Claimant nor any person acting on Claimant’s behalf will institute any Action against any Released Party based on any released Claim.
5.3 Confidentiality. The existence and terms of this Agreement are strictly confidential. Neither Party shall disclose Confidential Information to any third party except: (i) as required by law or court order, (ii) to tax or legal advisors subject to like confidentiality, (iii) to insurers or reinsurers with a legitimate need to know, or (iv) as necessary to obtain Court Approval.
[// GUIDANCE: For Pennsylvania, confidentiality provisions are generally enforceable but must allow statutory reporting or Medicare disclosure.]
5.4 Non-Disparagement. Each Party agrees not to publish or communicate derogatory statements concerning the other related to the Incident or this Agreement; statements made in legal proceedings or under subpoena are exempt.
5.5 Further Assurances. Each Party shall execute and deliver further documents and take additional actions reasonably necessary to effectuate this Agreement.
6. DEFAULT & REMEDIES
6.1 Events of Default.
a. Defendant fails to pay the Settlement Amount when due;
b. Claimant files or maintains any Action contrary to the releases herein;
c. Any representation or warranty under Section 4 proves materially false.
6.2 Notice and Cure. The non-defaulting Party shall provide written notice describing the default. The defaulting Party shall have:
i. Ten (10) business days to cure a monetary default;
ii. Twenty (20) business days to cure a non-monetary default, if curable.
6.3 Remedies. If the default is not cured within the applicable period:
a. The non-defaulting Party may seek specific performance, injunctive relief, and/or damages;
b. The prevailing Party shall be entitled to recover reasonable attorneys’ fees and costs;
c. Interest on unpaid amounts shall accrue at the lesser of ten percent (10%) per annum or the maximum lawful rate.
7. RISK ALLOCATION
7.1 Mutual Hold Harmless. Each Party shall indemnify, defend, and hold harmless the other Party from any claim by a governmental agency or third party asserting entitlement to any portion of the Settlement Amount arising from the indemnitee’s own obligations or representations.
7.2 Limitation of Liability. Except for willful misconduct or breach of the confidentiality covenant, liability under this Agreement is capped at the Settlement Amount.
7.3 Insurance. Defendant represents that it maintains liability insurance applicable to the Incident. No Party makes any representation as to coverage limits or availability beyond the Settlement Amount.
7.4 Force Majeure. No Party shall be liable for delays in performance caused by events beyond its reasonable control, provided that the Party invokes this clause by prompt written notice and uses diligent efforts to mitigate the delay.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement is governed by Pennsylvania substantive law.
8.2 Forum Selection. Any Action arising from or related to this Agreement shall be brought exclusively in the Court of Common Pleas of [COUNTY], Pennsylvania, or, if subject-matter jurisdiction is lacking, in the federal District Court for the Eastern/Middle/Western District of Pennsylvania, as applicable.
8.3 Waiver of Removal. Defendant waives the right to remove any Action commenced in state court to federal court.
8.4 Jury Trial. The Parties acknowledge that the metadata specifies no jury waiver; accordingly, each Party retains the right to a trial by jury as provided by law.
[// GUIDANCE: If clients wish to waive jury trial, add an express jury-waiver clause.]
9. GENERAL PROVISIONS
9.1 Entire Agreement. This Agreement supersedes all prior understandings regarding the subject matter and constitutes the entire agreement between the Parties.
9.2 Amendments. No modification is valid unless in writing and signed by both Parties (and approved by the court where Court Approval is required).
9.3 Waiver. No waiver of any provision is effective unless in writing. A waiver on one occasion is not a waiver on subsequent occasions.
9.4 Severability. If any provision is held invalid or unenforceable, the remaining provisions shall remain in full force, and the court shall reform the invalid provision to reflect the Parties’ original intent as closely as possible.
9.5 Assignment. Neither Party may assign its rights or delegate its obligations under this Agreement without prior written consent of the other, except that Defendant may assign its payment obligations in connection with a Structured Settlement to a qualified assignee.
9.6 Successors and Assigns. This Agreement binds and benefits the Parties and their respective heirs, executors, administrators, successors, and permitted assigns.
9.7 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 delivered by facsimile, PDF, or electronic signature platform (e.g., DocuSign) are deemed original.
9.8 Headings. Headings are for convenience only and shall not affect interpretation.
9.9 Construction. The Parties acknowledge that each Party has reviewed this Agreement with counsel, and any rule of construction resolving ambiguities against the drafting Party shall not apply.
9.10 Notice. All notices shall be in writing and delivered by (i) certified U.S. mail (return-receipt requested), (ii) nationally recognized overnight courier, or (iii) email with confirmation of receipt, to the addresses set forth below (or as later designated in writing). Notice is effective on receipt or refusal.
10. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
Claimant
Signature: [CLAIMANT SIGNATURE]
Name: [CLAIMANT NAME]
Date: ____
[If Claimant is a Minor or incapacitated:]
Signature of [PARENT / GUARDIAN / CONSERVATOR]
Name: [PRINTED NAME]
Title: [Guardian / Conservator]
Date: ____
[// GUIDANCE: Attach court order appointing guardian ad litem or fiduciary, if applicable.]
Defendant
Signature: [AUTHORIZED SIGNATORY]
Name: [PRINTED NAME]
Title: [TITLE]
Date: ____
Witness (optional)
Name: [PRINTED NAME]
Date: ____
[// GUIDANCE: Pennsylvania generally does not mandate notarization for settlement agreements, but notarization can bolster enforceability. Insert notary blocks below if desired or if court approval requires sworn statements.]
Exhibit A – Structured Settlement Payment Schedule
[Include annuity issuer, periodic payment amounts, start date, payment frequency, guarantees, and any commutation or beneficiary provisions.]
[// GUIDANCE: Attach additional exhibits as necessary (e.g., Medicare final demand letter, lien satisfaction letters, court approval order).]