Settlement Agreement and Mutual Release - Delaware

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JURISDICTION: Delaware
LAST UPDATED: 2026-03-18
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SETTLEMENT AGREEMENT AND MUTUAL RELEASE

(STATE OF DELAWARE)

THIS SETTLEMENT AGREEMENT AND MUTUAL RELEASE (this "Agreement") is entered into as of [__/__/____] (the "Effective Date") by and between:

PARTY A:

PARTY B:

(Party A and Party B are each a "Party" and collectively the "Parties.")

TABLE OF CONTENTS

1. Recitals and Background
2. Definitions
3. Settlement Consideration
4. Payment Terms and Mechanics
5. Mutual Release of Claims
6. Waiver of Unknown Claims
7. Mutual Covenant Not to Sue
8. Release of Joint Tortfeasors
9. No Admission of Liability
10. Dismissal of Pending Actions
11. Confidentiality
12. Non-Disparagement
13. Non-Competition and Non-Solicitation (Optional)
14. Tax Provisions and Indemnification
15. Representations and Warranties
16. Remedies for Breach
17. Governing Law and Jurisdiction
18. Jury Trial Waiver
19. Miscellaneous Provisions
20. Execution and Signatures

1. RECITALS AND BACKGROUND

1.1 Dispute Background. The Parties are involved in a dispute arising from or related to:

[________________________________]
[________________________________]
[________________________________]

(the "Dispute").

1.2 Pending Litigation. ☐ Litigation is pending:

• Case Caption: [________________________________]
• Docket Number: [________________________________]
• Court: ☐ Superior Court of Delaware, [____] County ☐ Delaware Court of Chancery ☐ Delaware Court of Common Pleas ☐ U.S. District Court for the District of Delaware ☐ Other: [________________________________]

☐ No litigation is currently pending.

1.3 Cross-Claims and Counterclaims. ☐ Cross-claims or counterclaims are pending between the Parties:

[________________________________]

☐ No cross-claims or counterclaims are pending.

1.4 Desire to Settle. The Parties desire to settle and resolve all claims between them, avoid further expense and uncertainty, and provide for mutual releases.

1.5 Adequate Consideration. The mutual releases, promises, covenants, and payment of the Settlement Amount constitute good and valuable consideration, the receipt and sufficiency of which each Party acknowledges.

2. DEFINITIONS

2.1 "Agreement" means this Settlement Agreement and Mutual Release, including all exhibits.

2.2 "Claims" means any and all claims, demands, actions, causes of action, suits, proceedings, complaints, charges, grievances, liabilities, obligations, damages, losses, debts, judgments, liens, costs, expenses (including attorneys' fees), and rights of every kind, whether known or unknown, suspected or unsuspected, disclosed or undisclosed, matured or unmatured, accrued or unaccrued, contingent or fixed, arising under statute, common law, equity, regulation, or otherwise.

2.3 "Effective Date" means the date first written above.

2.4 "Party A Released Parties" means Party A and its past, present, and future parents, subsidiaries, affiliates, officers, directors, managers, members, shareholders, partners, employees, agents, representatives, attorneys, insurers, predecessors, successors, and assigns.

2.5 "Party B Released Parties" means Party B and its past, present, and future parents, subsidiaries, affiliates, officers, directors, managers, members, shareholders, partners, employees, agents, representatives, attorneys, insurers, predecessors, successors, and assigns.

2.6 "Settlement Amount" means the amount specified in Section 3.1.

3. SETTLEMENT CONSIDERATION

3.1 Settlement Payment. As part of the mutual settlement:

☐ Party A pays Party B: $[________________________________]
☐ Party B pays Party A: $[________________________________]
☐ No monetary payment — the mutual releases constitute the sole consideration.
☐ Other consideration: [________________________________]

3.2 Allocation of Settlement Amount.

4. PAYMENT TERMS AND MECHANICS

4.1 Payment Schedule.

☐ Lump Sum: $[________________________________] due within [____] business days of the Effective Date.

☐ Installments:

4.2 Payment Method.

☐ Wire transfer ☐ ACH transfer ☐ Certified check payable to [________________________________]
☐ Check payable to counsel's trust account: [________________________________] ☐ Other: [________________________________]

4.3 Late Payment. Interest shall accrue at [____]% per annum, or the legal rate under 6 Del. C. § 2301 (5% over the Federal Reserve discount rate), whichever is less. The payee shall provide written notice, and the payor shall have [____] business days to cure.

4.4 Default and Acceleration. If the payor fails to cure, the payee may declare the entire balance immediately due and seek enforcement, including costs and attorneys' fees.

5. MUTUAL RELEASE OF CLAIMS

5.1 Release by Party A. Party A, on behalf of itself and all Party A Released Parties, hereby irrevocably and unconditionally releases, acquits, and forever discharges Party B Released Parties from any and all Claims arising out of, relating to, or connected with the Dispute and/or any events from the beginning of time through the Effective Date, including but not limited to:

(a) All Claims asserted or that could have been asserted in the Dispute;
(b) All Claims under Delaware statutory law, including the Delaware Discrimination in Employment Act (19 Del. C. § 710 et seq.), the Delaware Wage Payment and Collection Act (19 Del. C. § 1101 et seq.), the Delaware Consumer Fraud Act (6 Del. C. § 2511 et seq.), the Delaware General Corporation Law (8 Del. C. § 101 et seq.), the Delaware LLC Act (6 Del. C. § 18-101 et seq.), and any other Delaware statute;
(c) All Claims under federal law;
(d) All common law and equitable Claims, including breach of contract, breach of fiduciary duty, tort, fraud, misrepresentation, negligence, and unjust enrichment; and
(e) All Claims for damages and equitable relief.

5.2 Release by Party B. Party B, on behalf of itself and all Party B Released Parties, hereby irrevocably and unconditionally releases, acquits, and forever discharges Party A Released Parties from any and all Claims arising out of, relating to, or connected with the Dispute and/or any events from the beginning of time through the Effective Date, including the same categories described in Section 5.1(a)-(e).

5.3 Release Pursuant to 6 Del. C. § 2706. Each Party acknowledges that, pursuant to 6 Del. C. § 2706, any person 18 years of age or older may settle and compromise claims, and such release shall be valid and legally effective and shall bind all heirs, executors, and administrators.

5.4 Excluded Claims. The mutual releases do NOT extend to:

(a) Obligations arising under this Agreement;
(b) Claims that cannot be released as a matter of law, including workers' compensation claims (19 Del. C. § 2301 et seq.), vested ERISA benefits, and claims arising after the Effective Date;
(c) [________________________________] (specify additional exclusions).

5.5 Scope. Each Party acknowledges that its release is as broad as permitted by Delaware law and covers Claims not presently known or suspected.

6. WAIVER OF UNKNOWN CLAIMS

6.1 Express Waiver. EACH PARTY EXPRESSLY ACKNOWLEDGES THAT ITS RELEASE COVERS ALL CLAIMS, WHETHER KNOWN OR UNKNOWN, SUSPECTED OR UNSUSPECTED, DISCLOSED OR UNDISCLOSED.

6.2 Waiver of Protective Statutes. EACH PARTY EXPRESSLY WAIVES AND RELINQUISHES, TO THE FULLEST EXTENT PERMITTED BY DELAWARE LAW, ANY RIGHTS UNDER ANY LAW OR COMMON LAW PRINCIPLE THAT WOULD LIMIT THE RELEASE TO CLAIMS KNOWN OR SUSPECTED AT THE TIME OF EXECUTION, INCLUDING ANY STATUTE OR PRINCIPLE SIMILAR TO CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES:

"A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY."

6.3 Assumption of Risk. Each Party assumes the risk that facts may differ from current knowledge.

6.4 Initials Required.

Party A Initials: [____] Party B Initials: [____] Date: [__/__/____]

7. MUTUAL COVENANT NOT TO SUE

7.1 Covenant. Each Party covenants not to commence, maintain, or permit any action against the other Party's Released Parties with respect to any released Claim.

7.2 Third-Party Actions. Neither Party shall participate in third-party actions against the other's Released Parties except as required by law.

7.3 Breach Remedy. If either Party breaches this covenant: (a) the breaching Party shall immediately dismiss such action with prejudice; (b) the breaching Party shall indemnify the other for all costs and fees; and (c) the breaching Party shall repay any Settlement Amount received.

8. RELEASE OF JOINT TORTFEASORS

8.1 Pursuant to 10 Del. C. § 6304, a release of one joint tortfeasor does not discharge others unless the release so provides. The Parties agree:

☐ These releases apply ONLY to the Released Parties identified herein.
☐ These releases apply to ALL joint tortfeasors.

8.2 The released Parties shall not be liable for contribution under 10 Del. C. § 6304(b).

9. NO ADMISSION OF LIABILITY

9.1 This Agreement is a compromise. Nothing herein constitutes an admission of liability. Not admissible as evidence of liability except to enforce its terms, per Delaware Rule of Evidence 408.

10. DISMISSAL OF PENDING ACTIONS

10.1 Obligation. The Parties shall, within [____] business days of the Effective Date (and receipt of any payment due), jointly file a stipulation of dismissal with prejudice pursuant to Del. Super. Ct. Civ. R. 41(a) (or Del. Ch. Ct. R. 41 or the applicable court's rule).

10.2 Form.

☐ Stipulation of Dismissal with Prejudice
☐ Stipulated Judgment
☐ Other: [________________________________]

10.3 Cooperation. Each Party shall cooperate in executing all documents.

11. CONFIDENTIALITY

11.1 Confidential Terms. The terms of this Agreement shall be kept strictly confidential, except:

(a) Disclosure to attorneys, accountants, tax advisors, insurers, and financial advisors;
(b) Disclosure required by law, regulation, subpoena, court order, or SEC requirements;
(c) Tax reporting;
(d) Disclosure to immediate family members who agree to confidentiality; and
(e) As mutually agreed in writing.

11.2 Permitted Statements. "The matter has been resolved to the mutual satisfaction of the parties."

11.3 Breach. Material breach; injunctive relief, damages, and fees available.

12. NON-DISPARAGEMENT

12.1 Each Party agrees not to make disparaging or defamatory statements regarding the other Party or its Released Parties.

12.2 Exceptions. Truthful statements required by law, truthful testimony, and government agency communications are excepted.

13. NON-COMPETITION AND NON-SOLICITATION (OPTIONAL)

☐ This Section applies. ☐ This Section does NOT apply (skip to Section 14).

13.1 Non-Competition. For a period of [____] months following the Effective Date, neither Party shall, directly or indirectly, engage in [________________________________] within [________________________________] (geographic area).

13.2 Non-Solicitation. For a period of [____] months following the Effective Date, neither Party shall solicit, recruit, or hire any employee, contractor, customer, or client of the other Party.

14. TAX PROVISIONS AND INDEMNIFICATION

14.1 Each Party is responsible for its own tax obligations.

14.2 Neither Party has made any tax representations.

14.3 The payor shall issue required IRS forms per Section 3.2.

14.4 Each Party indemnifies the other from tax claims arising from the settlement.

15. REPRESENTATIONS AND WARRANTIES

15.1 Each Party Represents and Warrants:

(a) Full power and legal capacity, consistent with 6 Del. C. § 2706 (if individual, at least 18 years of age);
(b) No assignment or transfer of released Claims;
(c) Has read and understood the Agreement;
(d) Had opportunity to consult with counsel;
(e) Enters voluntarily, without duress;
(f) Conducted sufficient investigation; and
(g) No outside promises or inducements.

15.2 Entity Representations. If a Party is an entity, its execution has been duly authorized by all necessary corporate, organizational, or partnership action.

16. REMEDIES FOR BREACH

16.1 Injunctive Relief. Breach of Sections 5, 6, 7, 11, 12, or 13 would cause irreparable harm. The non-breaching Party may seek injunctive relief without bond.

16.2 Prevailing Party Fees. The prevailing Party recovers reasonable attorneys' fees.

17. GOVERNING LAW AND JURISDICTION

17.1 Governing Law. Laws of the State of Delaware, without choice-of-law principles.

17.2 Exclusive Jurisdiction.

☐ Superior Court of Delaware, [________________________________] County
☐ Delaware Court of Chancery
☐ U.S. District Court for the District of Delaware
☐ Any of the above, as appropriate

18. JURY TRIAL WAIVER

18.1 TO THE FULLEST EXTENT PERMITTED BY DELAWARE LAW, EACH PARTY KNOWINGLY, VOLUNTARILY, AND IRREVOCABLY WAIVES ANY RIGHT TO TRIAL BY JURY IN ANY ACTION ARISING FROM THIS AGREEMENT.

18.2 Initials.

Party A: [____] Party B: [____]

19. MISCELLANEOUS PROVISIONS

19.1 Entire Agreement. Supersedes all prior negotiations and understandings.

19.2 Amendments. Written instrument signed by both Parties required.

19.3 Severability. Invalid provisions modified to minimum extent necessary.

19.4 Waiver. Failure to enforce does not waive future enforcement.

19.5 Assignment. No assignment without consent, except to successors.

19.6 Notices. Written, deemed delivered upon personal delivery, overnight courier, three (3) business days after certified mail, or confirmed email.

19.7 Counterparts. May be executed in counterparts.

19.8 Electronic Signatures. Valid per 6 Del. C. § 12A-101 et seq. and 15 U.S.C. § 7001 et seq.

19.9 Headings. Convenience only.

19.10 Construction. Construed as jointly drafted.

19.11 Third-Party Beneficiaries. Each set of Released Parties are intended beneficiaries.

19.12 Binding Effect. Binds Parties and heirs, executors, administrators, successors, and permitted assigns.

20. EXECUTION AND SIGNATURES

PARTY A:

Signature: [________________________________]

Printed Name: [________________________________]

Title (if applicable): [________________________________]

Date: [__/__/____]

PARTY B:

Signature: [________________________________]

Printed Name: [________________________________]

Title (if applicable): [________________________________]

Date: [__/__/____]

WAIVER OF UNKNOWN CLAIMS — SEPARATE ACKNOWLEDGMENT

We, the undersigned, confirm that we have read, understand, and voluntarily agree to the waiver of unknown claims in Section 6, consistent with 6 Del. C. § 2706.

Party A Signature: [________________________________] Date: [__/__/____]

Party A Initials: [____]

Party B Signature: [________________________________] Date: [__/__/____]

Party B Initials: [____]

JURY TRIAL WAIVER — SEPARATE ACKNOWLEDGMENT

Party A Initials: [____] Party B Initials: [____]

EXHIBIT A — SETTLEMENT PAYMENT DETAILS

SOURCES AND REFERENCES

• 6 Del. C. § 2301 — Legal rate of interest
• 6 Del. C. § 2706 — Release and settlement by persons 18+
• 6 Del. C. § 12A-101 et seq. — Uniform Electronic Transactions Act
• 6 Del. C. § 1-306 — Waiver or renunciation after breach
• 6 Del. C. § 2511 et seq. — Consumer Fraud Act
• 6 Del. C. § 18-101 et seq. — Delaware LLC Act
• 8 Del. C. § 101 et seq. — Delaware General Corporation Law
• 10 Del. C. § 6304 — Release of joint tortfeasors
• 10 Del. C. § 8106 — Statute of limitations
• 19 Del. C. § 710 et seq. — Discrimination in Employment Act
• 19 Del. C. § 1101 et seq. — Wage Payment and Collection Act
• Del. Super. Ct. Civ. R. 41 — Dismissal of actions
• Del. Ch. Ct. R. 41 — Dismissal (Court of Chancery)
• Delaware Rule of Evidence 408 — Compromise and settlement
• 15 U.S.C. § 7001 et seq. — E-SIGN Act