Settlement Agreement No Admission of Liability Clause
(Federal)

This no admission of liability clause is a standard clause you can incorporate into a settlement agreement to represent that the settlement agreement does not constitute an admission by either party of any liability when settling a federal court litigation. This clause includes practical guidance and drafting notes. Settling a case can avoid the uncertainty of trial or a court ruling on a dispositive motion. You can also use a settlement to obtain at least a portion of what your client was seeking in the litigation. If you are representing a plaintiff, your client will likely obtain some measure of compensation. If you are representing a defendant, settlement can protect your client from a large jury verdict. Settling a case can also save your client substantial time and money in litigation expenses, especially if you settle before the parties conduct meaningful discovery. Once you reach a settlement, the parties will need to prepare a settlement agreement memorializing the agreement's terms. In most cases, the defendant will draft the settlement agreement for the plaintiff to review and sign. Ensure that the settlement agreement sets forth the essential agreement between the parties, including the amount that the defendant will pay the plaintiff, the timing of the payment, the form of payment, and the nature of any equitable relief to which the parties have agreed. You should also include a provision requiring the parties to file a stipulation dismissing the case—or the claims against the settling defendant if the case involves multiple defendants—with prejudice once the settlement is final. In addition to these items, you should also carefully consider whether to include other common provisions, including release clauses, confidentiality provisions, non-disparagement clauses, and liquidated damages provisions. For a model settlement agreement, see Settlement Agreement and Release (Federal). For additional practical guidance, see Settlement Fundamentals and Tactics (Federal) and Settlement: Drafting a Settlement Agreement Checklist (Federal).