Settlement Agreement and Mutual Release (Short Form)

SETTLEMENT AGREEMENT AND MUTUAL RELEASE (SHORT FORM)

State of Alabama

IMPORTANT NOTICE: This document resolves legal claims. Alabama Code § 6-5-440 establishes the principle that a plaintiff is entitled to but one satisfaction for the same injury. Read this Agreement carefully before signing and consult an attorney.

RECITALS AND PARTIES

This Settlement Agreement and Mutual Release (Short Form) (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

PARTY A (Releasing Party / Claimant):
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Representative/Counsel: [________________________________]

PARTY B (Released Party / Respondent):
Name: [________________________________]
Address: [________________________________]
City, State, ZIP: [________________________________]
Representative/Counsel: [________________________________]

Party A and Party B are collectively referred to as the "Parties."

CASE/DISPUTE REFERENCE:
Court (if applicable): [________________________________]
Case Name: [________________________________]
Case/Docket Number: [________________________________]
Nature of Dispute: [________________________________]
Date Dispute Arose: [__/__/____]

RECITALS

WHEREAS, a dispute has arisen between the Parties relating to [________________________________] (the "Dispute");

WHEREAS, the Parties desire to resolve the Dispute fully and finally, without admitting liability;

WHEREAS, Alabama law provides that a party is entitled to only one satisfaction of a claim, and that a release given to one joint tortfeasor may release all, unless the release expressly preserves claims against others (Ala. Code § 6-5-390);

WHEREAS, the Parties have had the opportunity to consult with counsel and understand the nature and extent of this Agreement;

NOW, THEREFORE, in consideration of the mutual covenants, releases, and promises set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

SECTION 1: SETTLEMENT PAYMENT AND CONSIDERATION

1.1 Settlement Amount.

In full and final satisfaction of all claims described herein, [________________________________] ("Payor") shall pay to [________________________________] ("Payee") the total sum of $[________________________________] (the "Settlement Amount"), subject to the following payment terms:

☐ Lump Sum Payment: The Settlement Amount shall be paid in a single payment on or before [__/__/____], by the following method:

☐ Check payable to: [________________________________]
☐ Wire transfer to account: [________________________________] (routing: [____________________])
☐ Other: [________________________________]

☐ Installment Payments: The Settlement Amount shall be paid in installments as follows:

1.2 Consideration Adequacy.
The Parties acknowledge that the consideration provided under this Agreement constitutes adequate and sufficient consideration under Alabama contract law, and that neither Party would have entered into this Agreement absent all of the consideration provided herein.

1.3 Tax Identification and Reporting.
Payee's Social Security Number / EIN: [________________________________]
(Payments of $600 or more may require IRS Form 1099 reporting. Each Party is responsible for its own tax obligations. This Agreement does not constitute tax advice.)

1.4 Attorneys' Fees and Costs.
☐ Each Party shall bear its own attorneys' fees and costs.
☐ Party [____] shall pay Party [____]'s attorneys' fees in the amount of $[________________________________].
☐ Attorneys' fees are incorporated within the Settlement Amount.

1.5 Default on Payment.
If Payor fails to make any payment when due, Payee shall provide written notice of default, and Payor shall have [____] days to cure. If uncured, the full remaining balance becomes immediately due and payable, and Payee may seek all available remedies including enforcement of this Agreement.

SECTION 2: MUTUAL RELEASE OF CLAIMS

2.1 Release by Party A.
Party A, on behalf of itself and its heirs, executors, administrators, successors, assigns, agents, officers, directors, employees, and representatives (collectively, "Party A Releasors"), hereby fully, finally, and forever releases, acquits, and discharges Party B and its heirs, executors, administrators, successors, assigns, agents, officers, directors, employees, insurers, and representatives (collectively, "Party B Releasees") from any and all claims, demands, actions, causes of action, suits, debts, obligations, liabilities, damages, losses, costs, expenses, and attorneys' fees of any kind or nature whatsoever, whether known or unknown, whether in law or equity, whether in contract, tort, statute, or otherwise, which Party A Releasors ever had, now have, or hereafter may have against Party B Releasees, arising out of, related to, or connected with the Dispute, through the Effective Date (the "Released Claims").

2.2 Release by Party B.
Party B, on behalf of itself and its heirs, executors, administrators, successors, assigns, agents, officers, directors, employees, and representatives (collectively, "Party B Releasors"), hereby fully, finally, and forever releases, acquits, and discharges Party A and its heirs, executors, administrators, successors, assigns, agents, officers, directors, employees, insurers, and representatives (collectively, "Party A Releasees") from any and all Released Claims arising out of, related to, or connected with the Dispute through the Effective Date.

2.3 Waiver of Unknown Claims.
THE PARTIES EXPRESSLY ACKNOWLEDGE that this Agreement is intended to cover all claims arising from the Dispute, whether presently known or unknown, suspected or unsuspected. The Parties waive and relinquish any right or benefit afforded by any doctrine limiting the scope of a general release with respect to unknown or unsuspected claims. The Parties acknowledge they may later discover facts in addition to or different from those they currently know or believe to be true, and agree that this Agreement shall nonetheless be a full and final release of all Claims arising from the Dispute.

2.4 Joint Tortfeasor Notice (Alabama).
The Parties are aware of Ala. Code § 6-5-390, which governs the effect of a release on joint tortfeasors. Under Alabama law, a general release of one tortfeasor may operate to release all joint tortfeasors unless the release expressly reserves rights against others. This release is intended to:

☐ Release ONLY the Parties named herein. Claims against any joint tortfeasor not a signatory to this Agreement are expressly preserved.
☐ Release ALL joint tortfeasors and co-defendants in the above-referenced matter.

2.5 Claims Not Released.
☐ Claims arising from the performance or breach of this Agreement.
☐ Claims arising after the Effective Date.
☐ Other excluded claims: [________________________________]

SECTION 3: NO ADMISSION OF LIABILITY

This Agreement is a compromise of disputed claims. Nothing herein constitutes an admission of liability, fault, negligence, wrongdoing, or any violation of law. Neither this Agreement nor the fact of settlement shall be admissible as evidence of liability in any proceeding.

SECTION 4: DISMISSAL WITH PREJUDICE

4.1 Obligation to Dismiss.
Within [____] calendar days of receipt of the Settlement Amount (or first installment), the Parties shall:

☐ File a Joint Stipulation of Dismissal with Prejudice pursuant to Ala. R. Civ. P. 41(a)(1)(ii).
☐ Other dismissal mechanism: [________________________________]

4.2 Filing Responsibility.
The following Party/counsel shall prepare and file dismissal papers: [________________________________]

4.3 Court Approval.
☐ Not applicable.
☐ Court approval required: ☐ Minor party (Ala. Code § 6-6-14) ☐ Incompetent party ☐ Other: [________________________________]

Note on Minor's Settlements: Under Ala. Code § 6-6-14, settlements on behalf of minors require court approval. This Agreement shall not be effective with respect to a minor's claims until court approval is obtained.

SECTION 5: CONFIDENTIALITY

☐ Confidentiality Applies. The existence, terms, and conditions of this Agreement are strictly confidential. The Parties agree not to disclose the terms to any third party except:
(a) to attorneys, accountants, and financial advisors under a duty of confidentiality;
(b) to spouses or domestic partners;
(c) as required by law, regulation, or court order;
(d) as necessary to enforce this Agreement;
(e) for income tax reporting purposes.

Note: Alabama courts have enforced confidentiality provisions in settlement agreements as contractual obligations. Breaching confidentiality may give rise to an action for damages.

☐ No Confidentiality Requirement.

SECTION 6: NON-DISPARAGEMENT

☐ Non-Disparagement Applies. Each Party agrees not to make false, misleading, or disparaging statements — oral, written, or electronic — regarding the other Party, its personnel, products, services, or business. This clause does not restrict truthful statements made pursuant to legal obligation.

☐ No Non-Disparagement Clause.

SECTION 7: REPRESENTATIONS AND WARRANTIES

Each Party represents and warrants that:

7.1 It has full legal authority to enter into this Agreement.
7.2 It has not assigned, transferred, or conveyed any Released Claim to any third party.
7.3 No other legal proceedings related to the Dispute are pending other than as disclosed.
7.4 It has been advised of its right to consult independent legal counsel and has either done so or knowingly waived that right.
7.5 This Agreement is entered into freely, voluntarily, and without duress or coercion.
7.6 It has read and fully understands this Agreement and its consequences.

SECTION 8: MISCELLANEOUS PROVISIONS

8.1 Governing Law.
This Agreement shall be governed by the laws of the State of Alabama, without regard to conflict-of-laws principles.

8.2 Venue.
☐ Exclusive jurisdiction and venue in the Circuit Court of [________________________________] County, Alabama.
☐ Exclusive jurisdiction in the United States District Court for the [________________________________] District of Alabama.
☐ Other: [________________________________]

8.3 Integration.
This Agreement constitutes the entire understanding between the Parties regarding the subject matter hereof and supersedes all prior agreements, representations, and understandings. Amendments must be in writing and signed by both Parties.

8.4 Severability.
If any provision is held invalid or unenforceable, the remaining provisions shall continue in full force.

8.5 Counterparts / Electronic Signatures.
This Agreement may be executed in counterparts. Electronic signatures shall be valid and binding.

8.6 No Third-Party Beneficiaries.
This Agreement is for the benefit of the Parties only.

8.7 Construction.
This Agreement shall be construed without regard to any presumption or rule requiring construction against the party causing this Agreement to be drafted.

SECTION 9: ALABAMA-SPECIFIC DISCLOSURES

9.1 Workers' Compensation. If any released claim involves a workplace injury, consult with an attorney regarding the effect on Alabama workers' compensation rights under the Alabama Workers' Compensation Act, Ala. Code § 25-5-1 et seq.

9.2 Uninsured/Underinsured Motorist. If this settlement involves an automobile accident and UM/UIM coverage, confirm compliance with Alabama UM/UIM consent-to-settle requirements.

9.3 ADEA/Age Discrimination Waiver. If this Agreement includes a waiver of ADEA claims, additional Older Workers Benefit Protection Act requirements apply, including a 21-day review period and a 7-day revocation period.

9.4 Government Parties. If a government entity is a party, review applicable Alabama statutes on authority to settle and required approvals.

9.5 Supreme Court of Alabama Guidance. Alabama courts require that settlement agreements be definite and certain in all material terms to be enforceable. Vague or indefinite terms may render the agreement unenforceable. Ensure all material terms are clearly stated.

SECTION 10: SIGNATURES

BY SIGNING BELOW, EACH PARTY CONFIRMS IT HAS READ, UNDERSTANDS, AND AGREES TO THIS AGREEMENT IN ITS ENTIRETY.

PARTY A:

Signature: [________________________________]
Printed Name: [________________________________]
Title (if applicable): [________________________________]
Date: [__/__/____]

Party A's Counsel (if applicable):

Signature: [________________________________]
Printed Name: [________________________________]
Alabama Bar Number: [________________________________]
Firm: [________________________________]
Date: [__/__/____]

PARTY B:

Signature: [________________________________]
Printed Name: [________________________________]
Title (if applicable): [________________________________]
Date: [__/__/____]

Party B's Counsel (if applicable):

Signature: [________________________________]
Printed Name: [________________________________]
Alabama Bar Number: [________________________________]
Firm: [________________________________]
Date: [__/__/____]

OPTIONAL: NOTARIZATION

NOTARIZATION — PARTY A:

State of Alabama
County of [________________________________]

On [__/__/____], before me, [________________________________], a Notary Public for the State of Alabama, personally appeared [________________________________], known to me to be the person whose name is subscribed to the within instrument and acknowledged execution thereof.

Notary Public Signature: [________________________________]
My Commission Expires: [__/__/____]
[NOTARY SEAL]

NOTARIZATION — PARTY B:

State of Alabama
County of [________________________________]

On [__/__/____], before me, [________________________________], a Notary Public for the State of Alabama, personally appeared [________________________________], known to me to be the person whose name is subscribed to the within instrument and acknowledged execution thereof.

Notary Public Signature: [________________________________]
My Commission Expires: [__/__/____]
[NOTARY SEAL]

EXHIBITS / ATTACHMENTS

☐ Exhibit A — Payment Schedule
☐ Exhibit B — Promissory Note (if installments)
☐ Exhibit C — Joint Stipulation of Dismissal
☐ Exhibit D — Other: [________________________________]

SOURCES AND REFERENCES

• Alabama Code Title 6 (Civil Practice): https://codes.findlaw.com/al/title-6-civil-practice/
• Ala. Code § 6-5-440 (One Satisfaction Rule): https://law.justia.com/codes/alabama/
• Ala. Code § 6-5-390 (Release of Joint Tortfeasors): https://law.justia.com/codes/alabama/
• Alabama Rules of Civil Procedure Rule 41: https://judicial.alabama.gov/
• IRS Form 1099 reporting: https://www.irs.gov/forms-pubs/about-form-1099-misc