Settlement Offer Letter Template – Free Download 2026

This letter is submitted on a without-prejudice basis and constitutes a confidential settlement communication protected from disclosure pursuant to Federal Rule of Evidence 408 and analogous state evidentiary rules. This communication is not an admission of liability, wrongdoing, or the validity of any claim, and shall not be used as evidence in any proceeding except to enforce a fully executed settlement agreement. The purpose of this communication is solely to explore the possibility of resolving the claims described herein without further litigation.

The parties are engaged in a dispute arising from [briefly describe the dispute — e.g., alleged breach of the [Agreement] dated [____________]; personal injury sustained on [____________]; alleged [infringement / fraud / discrimination] occurring on or about [____________]]. [Offering Party] has carefully evaluated the merits of all claims and defenses and, in the interest of achieving a cost-effective, confidential, and mutually acceptable resolution, makes the following settlement offer without prejudice to any rights, defenses, or positions that [Offering Party] may assert in any legal proceeding.

In full and complete settlement of all claims, counterclaims, demands, and causes of action arising from or related to the Dispute, [Offering Party] proposes the following terms: (a) Payment: [Offering Party] shall pay to [Receiving Party] the total sum of $[____________] (the "Settlement Amount"), payable by [wire transfer / certified check / ACH] within [____] days of execution of a formal written settlement agreement; (b) Dismissal: The parties shall execute a stipulation for dismissal with prejudice of [all pending claims / the action captioned ____________], to be filed with the Court within [____] days of receipt of the Settlement Amount; and (c) Cooperation: Each party shall execute such additional documents as may be reasonably necessary to effectuate the settlement.

The Settlement Amount represents a negotiated compromise of disputed claims and is not an admission by [Offering Party] that any liability exists or that any damages are owed. The parties acknowledge that each has had the opportunity to consult with legal counsel regarding the terms proposed herein and that any settlement ultimately reached shall be entered into knowingly, voluntarily, and without coercion.

As a material term of the proposed settlement, [Receiving Party] shall execute a general release in favor of [Offering Party] and its affiliates, officers, directors, employees, agents, successors, and assigns, releasing all claims, known and unknown, asserted or unasserted, arising from or related to the Dispute through the date of the release. The release shall be mutual to the extent [Offering Party] has asserted or may assert counterclaims against [Receiving Party]. To the extent applicable, the release shall include a waiver of the protections afforded by California Civil Code § 1542 and analogous statutes of other jurisdictions.

This offer will remain open for acceptance until [____________] at 5:00 p.m. [time zone] (the "Acceptance Deadline"). To accept this offer, [Receiving Party] must communicate written acceptance to [Offering Party's counsel] on or before the Acceptance Deadline. Acceptance must be unequivocal and unconditional; any purported acceptance that modifies, conditions, or qualifies any term of this offer shall be deemed a counteroffer and rejection of this offer. If this offer is not timely accepted, it is automatically withdrawn and shall have no further force or effect.

Upon timely acceptance, the parties shall negotiate in good faith and execute a formal written settlement agreement and release within [____] days, incorporating the terms set forth herein together with standard settlement agreement provisions including confidentiality, non-disparagement, representations and warranties, and governing law. [Offering Party] reserves the right to withdraw this offer at any time prior to acceptance, and no obligation to settle shall arise unless and until a formal written settlement agreement has been fully executed by all parties.