This is an example of a terms of settlement in a debt claim. It is important to write terms of settlement using your own details and based on your own circumstances. If you need more help, get legal advice.
For instructions on how to prepare terms of settlement, see Instructions for writing terms of settlement.
Case study - Meena and Fantastic Florists
Meena runs a small business from home, doing website design and IT support for other small businesses. One of her regular clients, Fantastic Florists, has failed to pay her invoice in the amount of $4,000 for the website she built. Meena sent a couple of reminder letters but there has been no response. She tried to contact Fiona from Fantastic Florists by telephone but could not reach her. Meena sent a letter of demand to Fantastic Florists. Fiona from Fantastic Florists offered to pay for part of the outstanding invoice. Meena refused Fiona's offer and started legal action in the Small Claims Division of the Local Court to recover the outstanding amount from Fantastic Florists. At the first court date, Fiona and Meena come to an agreement to settle Meena's claim. They write up terms of settlement.
TERMS OF SETTLEMENT BETWEEN
MEENA VISHWANA (Plaintiff)
FIONA FRAME trading as Fantastic Florists (Defendant)
LOCAL COURT FILE NUMBER: SC20xx/766
The defendant will pay the plaintiff the amount of $3,500 on or before 31 December 20xx.
The defendant will not be liable to pay any additional interest if she pays $3,500 by 31 December 20xx.
If the defendant fails to pay $3,500 on or before 31 December 20xx, the plaintiff reserves the right to recommence legal proceedings against the defendant without notice for the full $4,000 claimed, plus interest and costs.
If the defendant pays $3,500 on or before 31 December 20xx, the plaintiff agrees to file a notice of discontinuance within 14 days of payment.
The terms of this agreement are confidential.
Each party will pay their own costs.
Date: 24 November 20xx
In the presence of: Ella Mavis
In the presence of: Bob Atkins