What is Full and Final Settlement Legal Meaning?
Full and final settlement legal meaning includes all property that has been included in a settlement between two or more parties.3 min read
2. What Does "Full and Final Settlement" Mean?
3. Things to Consider Before Signing a Settlement Agreement
4. Benefits of a Settlement Agreement
Full and final settlement legal meaning includes all property that has been included in a settlement between two or more parties.
History and Definition of Settlement
A settlement is an agreement that resolves or establishes the rights of one or more parties. This type of agreement resolves a litigation or dispute, oftentimes through a compromise by at least one of the involved parties.
What Does "Full and Final Settlement" Mean?
In this phrase, the word “full” signifies the resolution of all issues involved in the dispute. If an asset isn't included in the full and final settlement, the person who previously owned the asset will take it back as their property. With respect to personal injury claims in the state of New Mexico, the full and final settlement process includes all assets in question and is the final step.
For example, suppose you are injured in a motor vehicle accident. First you'll go through the claim settlement process with the automotive insurance company. After completing the settlement process, you discovers new injuries that were not treated initially or a need for additional medical care for existing injuries. You may wonder whether the settlement agreement can be re-opened by the insurance company or whether you can file a new lawsuit for the additional damages.
In both of these cases, the answer is probably no. Before settling and before you receive any payment, you will go through the process of settling with an opposing attorney or insurance company. It is nearly impossible to obtain payment for additional damages after signing a settlement agreement and coming to terms upon which both parties agree. An insurance company usually agrees to settle the claim and make payment in exchange for a release from any future, present, or past claims that stem from the incident.
Many settlement agreements contain legal language, such as the following:
You agree to waive any future right to sue or make a claim for any and all claims related to the incident settled within the terms of this agreement. The waiving of your rights includes any claims that may have been unknown at the time of signing the agreement, as well as unknown future medical injuries or effect and the worsening of any conditions arising from the incident or claim.
Things to Consider Before Signing a Settlement Agreement
Before you sign or agree to the terms of the settlement, you must understand the extent of any injuries that resulted from the incident. It's also important to understand the potential need for any medical care in the future. Be sure to consult with your treating physician to get the information you will need, including:
- The likelihood of a need for future medical treatment or care
- A description of the type of treatment or care needed, as well as the extent of the treatment
- A cost estimate for the expected future medical treatment or care
- Whether the physician believes you will need ongoing care or treatment for the rest of your life
Benefits of a Settlement Agreement
It might seem unfair that by signing a settlement agreement, you waive the right to make any additional claims for injuries or medical claims that weren't known about at the time the agreement was made. However, when a settlement agreement can be changed or undone months or years after it has been signed, the claim will never feel truly complete or settled. The benefits of signing this type of agreement would essentially be gone if it could be re-opened at any point.
Settlement agreements are also critical in the legal process. Without these agreements, the American court system would be full of personal injury lawsuits and other types of trials. To keep things moving, the courts need settlement agreements. Courts can also more effectively maintain the efficiency and integrity of the system when settlement agreements are used.
A binding settlement agreement offers benefits to all involved parties. To avoid being disappointed by the terms of a settlement, it's important to prepare thoroughly. Go through all documentation of any existing, future, and past claims, and maintain the information for any claims you wish to make that are related to the incident. You might want to consult with a personal injury attorney to understand the process and to make sure that the settlement process resolves your claims fairly.
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