PERSONAL INJURY SETTLEMENT AGREEMENT
AND MUTUAL RELEASE OF ALL CLAIMS
(Texas – Governed by Texas state tort law)
[// GUIDANCE: This template is intentionally comprehensive. Delete any provisions that are not applicable to a particular matter and update all bracketed placeholders before circulation.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Operative Provisions
3.1 Settlement Consideration
3.2 Conditions Precedent & Subsequent
3.3 Tax Matters
3.4 Medicare / Governmental Liens - Representations & Warranties
- Covenants & Restrictions
- Default & Remedies
- Risk Allocation
- Dispute Resolution
- Minor Settlement Approval (If Applicable)
- General Provisions
- Execution Block
1. DOCUMENT HEADER
1.1 Parties. This Personal Injury Settlement Agreement and Mutual Release of All Claims (the “Agreement”) is entered into as of [EFFECTIVE DATE] (the “Effective Date”) by and between:
(a) [RELEASOR LEGAL NAME], an individual [or entity] with a mailing address at [ADDRESS] (“Releasor”); and
(b) [RELEASEE LEGAL NAME], a [corporation/limited liability company/etc.] organized under the laws of [STATE] with a principal place of business at [ADDRESS] (“Releasee”).
1.2 Recitals.
A. Releasor alleges that on or about [DATE OF INCIDENT] (the “Incident”), Releasor sustained personal injuries and other damages (collectively, the “Injuries”) arising out of or relating to [BRIEF DESCRIPTION OF INCIDENT].
B. Releasee expressly denies all liability but desires to resolve any and all claims arising from or relating to the Incident without admission of fault.
C. The Parties enter into this Agreement to fully and finally settle all actual or potential claims in accordance with the terms and conditions set forth herein.
NOW, THEREFORE, in consideration of the mutual promises, covenants, and releases contained in this Agreement and other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following terms shall have the meanings set forth below. Defined terms may be used in the singular or plural, as the context requires.
“Action” means any past, present, or future claim, demand, lawsuit, arbitration, administrative proceeding, or other legal or equitable action relating in any way to the Incident.
“Agreement” has the meaning set forth in Section 1.
“Claim(s)” means any and all past, present, or future claims, demands, causes of action, rights, damages, costs, expenses, or liabilities of every kind or nature, whether known or unknown, asserted or unasserted, contingent or fixed.
“Defense Costs” means all reasonable attorneys’ fees, expert fees, court costs, and other litigation expenses incurred in defending any Released Claim.
“Gross Settlement Amount” means the total monetary consideration to be paid under Section 3.1, consisting of any Cash Payment and, if applicable, any Periodic Payments.
“Minor” means any individual who has not attained the age of eighteen (18) years as of the Effective Date.
“Net Settlement Amount” means the portion of the Gross Settlement Amount remaining after deduction of (i) attorneys’ fees and costs, (ii) subrogation interests, and (iii) lien or governmental reimbursement obligations.
“Periodic Payments” means any structured, periodic, or annuitized payments to be made pursuant to Section 3.1(b).
“Released Claims” has the meaning given in Section 7.1(a).
“Released Parties” has the meaning given in Section 7.1(b).
“Settlement Funds” means funds delivered in satisfaction of the Cash Payment obligation under Section 3.1(a).
[// GUIDANCE: Add, amend, or delete definitions to align with the specific transaction.]
3. OPERATIVE PROVISIONS
3.1 Settlement Consideration.
(a) Cash Payment. Within [___] business days after satisfaction of the Conditions Precedent in Section 3.2(a), Releasee shall pay to Releasor (or to Releasor’s counsel trust account) the sum of $[AMOUNT] (the “Cash Payment”) by wire transfer or other immediately available funds.
(b) Periodic Payments (If Any). If the Parties agree to a structured settlement, Releasee (or its insurer) shall purchase an annuity contract from [ANNUITY PROVIDER NAME] providing for Periodic Payments to Releasor in the amounts and on the schedule set forth in Exhibit A.
(c) Total Settlement. The Gross Settlement Amount equals the Cash Payment plus the actuarial present value of any Periodic Payments. Releasor acknowledges that the Gross Settlement Amount constitutes the sole consideration for this Agreement.
3.2 Conditions Precedent & Subsequent.
(a) Conditions Precedent. Releasee’s payment obligations are conditioned on:
i. Receipt of an executed copy of this Agreement bearing all requisite signatures;
ii. Receipt of a properly completed Form W-9 (or W-8, as applicable);
iii. Receipt of court approval pursuant to Section 9 if the settlement involves a Minor; and
iv. Delivery of any additional settlement documents reasonably requested by Releasee, including but not limited to lien resolution statements and confidentiality stipulations.
(b) Conditions Subsequent. If any governmental agency, court, or lienholder rejects or materially alters the settlement terms after payment has been made, Releasor shall, upon written demand, return all Settlement Funds to Releasee, whereupon this Agreement shall be null and void.
3.3 Tax Matters.
(a) The Parties intend that damages for personal physical injuries paid under this Agreement qualify for exclusion from gross income under 26 U.S.C. § 104(a)(2).
(b) Releasor shall be solely responsible for any tax liability that may result from the settlement. Releasee makes no representation regarding the tax treatment of any payment hereunder.
(c) Each Party shall cooperate in good faith to effectuate any structure intended to preserve favorable tax treatment.
3.4 Medicare / Governmental Liens.
(a) Releasor represents that Releasor is [choose: “is” / “is not”] presently enrolled in Medicare.
(b) Releasor shall be solely responsible for satisfying any Medicare, Medicaid, TRICARE, VA, workers’ compensation, or other governmental liens arising from the Incident and shall indemnify the Released Parties against any related claims, penalties, or interest.
4. REPRESENTATIONS & WARRANTIES
4.1 By Releasor. Releasor hereby represents and warrants that:
(a) Releasor has full legal capacity and authority to enter into this Agreement;
(b) No other person or entity has an interest in the Released Claims that has not been disclosed;
(c) Releasor has not assigned, pledged, or otherwise transferred any Released Claim;
(d) Releasor has had the opportunity to consult with independent legal counsel and enters into this Agreement voluntarily and without duress; and
(e) In the case of a Minor, the individual(s) executing this Agreement on the Minor’s behalf have full authority to do so and shall promptly seek court approval under Section 9.
4.2 By Releasee. Releasee represents and warrants that:
(a) Releasee has full power and authority to enter into this Agreement;
(b) The individual executing this Agreement on Releasee’s behalf is duly authorized; and
(c) Releasee (or its insurer) has adequate financial resources to satisfy the payment obligations herein.
4.3 Survival. The representations and warranties shall survive the Effective Date and any payment made hereunder.
5. COVENANTS & RESTRICTIONS
5.1 Confidentiality. Except as required by law or court order, the Parties shall keep the terms of this Agreement and any underlying negotiations strictly confidential.
5.2 No Disparagement. The Parties shall refrain from any statement or conduct that could reasonably be expected to disparage or harm the reputation of the other Party.
5.3 Lien Resolution. Releasor covenants to resolve, satisfy, and discharge all liens, subrogation claims, or reimbursement interests relating to the Incident within [___] days after receipt of the Settlement Funds.
5.4 Further Assurances. The Parties shall execute and deliver such additional documents and take such further actions as may be reasonably necessary to carry out the intent of this Agreement.
6. DEFAULT & REMEDIES
6.1 Events of Default. A Party shall be in default if it fails to perform any material obligation under this Agreement and does not cure such failure within ten (10) days of written notice.
6.2 Remedies.
(a) Monetary Default by Releasee. If Releasee fails to timely make payment, Releasor may (i) enforce specific performance with interest at [___]% per annum or (ii) elect to rescind this Agreement and reinstate the Action.
(b) Breach of Confidentiality or Covenants. Non-breaching Party may seek injunctive relief and recover actual damages, including reasonable attorneys’ fees.
6.3 Attorneys’ Fees. The prevailing Party in any action to enforce or interpret this Agreement shall be entitled to recover reasonable attorneys’ fees and costs.
7. RISK ALLOCATION
7.1 Mutual Release.
(a) Released Claims. Releasor, on behalf of Releasor and Releasor’s heirs, executors, administrators, successors, and assigns, hereby irrevocably releases and forever discharges Releasee and the other Released Parties from any and all Released Claims. “Released Claims” means any Claim arising out of or relating to the Incident or the Injuries, INCLUDING CLAIMS THAT ARE UNKNOWN, UNSUSPECTED, OR UNANTICIPATED as of the Effective Date.
(b) Released Parties. “Released Parties” means Releasee, its past, present, and future parents, subsidiaries, affiliates, insurers, reinsurers, officers, directors, shareholders, employees, agents, attorneys, successors, and assigns.
(c) Mutuality. In consideration of the releases herein, Releasee hereby releases Releasor from any Claim Releasee may have against Releasor relating to the Incident.
7.2 Limitation of Liability. The total liability of Releasee and the other Released Parties for the Released Claims shall not exceed the Gross Settlement Amount.
7.3 Indemnification for Liens. Releasor shall indemnify, defend, and hold harmless the Released Parties from any lien, subrogation claim, or reimbursement obligation asserted against the settlement proceeds, together with Defense Costs.
7.4 Force Majeure. No Party shall be liable for delay or failure in performance due to events beyond its reasonable control, including acts of God, war, or governmental action.
8. DISPUTE RESOLUTION
8.1 Governing Law. This Agreement shall be governed by and construed in accordance with the substantive laws of the State of Texas, without regard to its conflict-of-laws principles.
8.2 Forum Selection. Exclusive jurisdiction and venue for any dispute arising under this Agreement shall lie in the state courts of competent jurisdiction located in [COUNTY], Texas.
8.3 Jury Waiver. [INTENTIONALLY OMITTED – not applicable per metadata.]
8.4 Arbitration. [INTENTIONALLY OMITTED – not applicable per metadata.]
9. MINOR SETTLEMENT APPROVAL (IF APPLICABLE)
9.1 Court Approval Required. If Releasor is a Minor, the Parties shall promptly file a friendly suit in the appropriate Texas state court seeking judicial approval of this Agreement.
9.2 Appointment of Guardian Ad Litem. The court shall be requested to appoint a guardian ad litem to evaluate the fairness of the settlement, unless waived by the court.
9.3 Structured Settlement. Any Periodic Payments to a Minor shall:
(a) Be paid into an annuity or trust compliant with Texas law;
(b) Name the Minor as the sole beneficiary; and
(c) Provide that the annuity or trust is irrevocable and non-assignable until the Minor reaches the age of majority, except as otherwise ordered by the court.
9.4 Settlement Not Binding Absent Approval. Until entry of a final court order approving the settlement, this Agreement shall be conditional and unenforceable as to the Minor.
[// GUIDANCE: Delete Section 9 in its entirety if no Minor is involved.]
10. GENERAL PROVISIONS
10.1 Entire Agreement. This Agreement constitutes the entire understanding of the Parties and supersedes all prior negotiations and agreements, whether oral or written, relating to its subject matter.
10.2 Amendments; Waivers. Any amendment or waiver must be in a written instrument signed by all Parties and expressly stating the intent to modify or waive.
10.3 Assignment. No Party may assign or delegate any right or obligation under this Agreement without the prior written consent of the other Party, except that Releasee may assign payment obligations to its insurer or an annuity issuer for purposes of a structured settlement.
10.4 Successors & Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective heirs, representatives, successors, and permitted assigns.
10.5 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to render it valid.
10.6 Counterparts; Electronic Signatures. This Agreement may be executed in counterparts, each of which shall be deemed an original. Signatures delivered by facsimile, PDF, or other electronic means shall be deemed original and binding.
10.7 Headings. Headings and section titles are for convenience only and shall not affect the interpretation of this Agreement.
10.8 Construction. The Parties acknowledge that each has reviewed and negotiated this Agreement and agree that no rule of strict construction shall apply against either Party.
10.9 Notices. All notices required or permitted under this Agreement shall be in writing and delivered (i) by hand with signed receipt, (ii) by certified mail, return receipt requested, postage prepaid, or (iii) by nationally recognized overnight courier, addressed to the receiving Party at the address set forth in Section 1.1, or such other address as may be designated by notice.
11. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
| RELEASOR | RELEASEE |
|---|---|
| [RELEASOR NAME] | [RELEASEE NAME] |
| Signature: ________ | Signature: ________ |
| Name: _______ | Name: _______ |
| Title (if applicable): __ | Title: ______ |
| Date: _______ | Date: _______ |
[Notary Acknowledgment – add if local practice requires]
EXHIBIT A
Schedule of Periodic Payments
[Insert payment dates, amounts, and annuity details, or delete if not applicable.]
[// GUIDANCE: Review local rules (e.g., Tex. R. Civ. P. 44, Tex. Prop. Code § 142.008) for any additional filings or procedural steps required for Minor settlements or structured settlements in Texas.]