After much disagreement, the Owner, Designer, Insurer(s), and Contractor(s) have agreed to resolve their differences through a settlement. Do these things to help avoid future angst:
Written: All settlements should be written. A settlement is a new contract among the parties, so treat it as such. Besides, memories are fading faster than ever as we use more electronic media.
Essential Terms: Warranty, Indemnity, Confidentiality (detail all duties that end vs. those that continue).
Essential Documents: Don’t just reference other essential documents; attach them to the written settlement agreement (e.g., final lien/claim release, final change order, and/or tax forms).
Payment: Timing and Method. (If there will be damages for delay of settlement payment, consider adding a liquidated damages clause. Will payment be by wire transfer, physical check, credit, other?)
Enforcement: Include a liquidated damages provision if damages will come from delayed payment. And, since it’s a new contract, will you have to file another lawsuit to enforce the agreement? If so, consider a consent judgment where all parties pre-agree that if the terms are not met, a Court can efficiently and expeditiously enforce.
Closeout: Detail how, who, and when other issues will be closed (e.g., dismissal of all litigation or completion of outstanding work).
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Where Does the Buck Stop?
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On the desk of President Harry S. Truman […]
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