Third Party Settlement Agreement for India

Third Party Settlement Agreement Template for India

This document is a comprehensive Third Party Settlement Agreement governed by Indian law, designed to facilitate and formalize the resolution of disputes between two primary parties with the involvement of a third party acting as facilitator or guarantor. The agreement incorporates essential elements required under the Indian Contract Act, 1872, and complies with relevant provisions of the Code of Civil Procedure, 1908. It provides a structured framework for documenting settlement terms, mutual releases, payment arrangements, and the specific role and obligations of the third party. The agreement includes provisions for confidentiality, representations and warranties, and enforcement mechanisms under Indian jurisdiction.

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What is a Third Party Settlement Agreement?

The Third Party Settlement Agreement is a crucial legal instrument used in Indian dispute resolution practice when parties seek to resolve their differences with the involvement of a third party who either facilitates the settlement or provides additional security for its performance. This document becomes relevant when direct settlement between disputing parties requires external intervention, guarantee, or facilitation. It incorporates comprehensive settlement terms, including payment schedules, mutual releases, and specific obligations of all parties involved. The agreement must comply with Indian contract law principles and civil procedure requirements, making it particularly important to include proper consideration, clear terms, and appropriate execution formalities. It's commonly used in commercial disputes, financial arrangements, and situations where additional security or facilitation is needed for settlement implementation.

What sections should be included in a Third Party Settlement Agreement?

1. Parties: Identifies all parties to the agreement including the two primary disputing parties and the third party facilitating the settlement

2. Background: Recitals explaining the nature of the dispute, relationship between parties, and context leading to settlement

3. Definitions: Defines key terms used throughout the agreement for clarity and consistency

4. Settlement Terms: Details the core settlement arrangements including payment terms, actions to be taken, and timelines

5. Consideration: Specifies the consideration being provided by each party as part of the settlement

6. Release and Discharge: Mutual release of claims and obligations between the parties

7. Confidentiality: Obligations regarding confidentiality of the settlement terms and related information

8. Representations and Warranties: Statements of fact and guarantees by each party regarding their authority and capacity

9. Third Party Role and Obligations: Specific responsibilities and role of the third party in facilitating or guaranteeing the settlement

10. Governing Law and Jurisdiction: Specifies Indian law as governing law and relevant jurisdiction for disputes

11. Notices: Process and contact details for serving notices under the agreement

12. Entire Agreement: Confirms the agreement represents the entire understanding between parties

What sections are optional to include in a Third Party Settlement Agreement?

1. Non-Admission of Liability: Statement that settlement does not constitute admission of liability - used when specifically requested by settling parties

2. Tax Implications: Addresses responsibility for taxes arising from settlement - needed when settlement involves significant monetary compensation

3. Non-Disparagement: Prevents parties from making negative statements about each other - useful in high-profile or contentious disputes

4. Future Cooperation: Terms for ongoing relationship between parties - relevant when parties need to maintain business relationships

5. Insurance and Indemnity: Coverage of insurance aspects and indemnification - needed when settlement involves ongoing risks or liabilities

6. Regulatory Compliance: Specific regulatory obligations - required when settlement touches regulated industries or activities

What schedules should be included in a Third Party Settlement Agreement?

1. Schedule 1 - Settlement Payment Details: Detailed breakdown of settlement amounts, payment schedule, and banking details

2. Schedule 2 - Disputed Claims: List of all claims being settled under the agreement

3. Schedule 3 - Asset Transfer Details: Specifics of any assets being transferred as part of settlement

4. Appendix A - Related Proceedings: List of all legal proceedings being terminated as part of settlement

5. Appendix B - Form of Release: Template for any additional release documents required

6. Appendix C - Execution Steps: Chronological list of actions required to implement the settlement

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents | Serial Founder & Legal AI Author

Jurisdiction

India

Publisher

Genie AI

Cost

Free to use
Relevant Industries

Banking and Financial Services

Real Estate and Construction

Manufacturing

Information Technology

Retail and Consumer Goods

Healthcare

Professional Services

Energy and Infrastructure

Telecommunications

Insurance

Relevant Teams

Legal

Compliance

Risk Management

Finance

Corporate Affairs

Dispute Resolution

Contract Administration

Company Secretarial

Treasury

Corporate Governance

Relevant Roles

Legal Counsel

Chief Legal Officer

Dispute Resolution Manager

Corporate Lawyer

Compliance Officer

Risk Manager

Chief Financial Officer

Settlement Officer

Mediation Coordinator

Contract Manager

Company Secretary

General Manager - Legal

Director of Legal Affairs

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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