Settlement Negotiation

A Settlement Offer Letter is a written communication between two parties in a dispute. The dispute does not have to be in a court of law. One party sends the other party this Settlement Offer Letter, with the proposed terms for a complete settlement between the parties.

Rather than a formal legal document, this letter can be thought of as an opportunity to begin a dialogue to resolve the dispute. Although the terms listed in this letter will generally become the terms of the Settlement Agreement, this letter does not create a legally binding contract.

Address It Properly

The first step to writing a settlement letter is to include all the correct information. You’ll want to start by being sure to include your full name, current address, and telephone number. Then, you’ll need to specify the date the letter was written and the account number you are referencing. Finally, include the creditor’s name and contact information.

Explain Why

Once you’ve addressed the letter, begin it by getting straight to the point. Say that you are writing in reference to the account number above, and you are hoping to reach a settlement with them.

Explain why they should settle with you.

If you owe them money, explain that you are currently unable to pay your debt in full and offer a few specific details about what is causing your financial hardship. Be clear about how much you’re willing to pay and what you expect. Then, transition into how much you’re able to offer them in the form of a settlement and state what you would like from them in return for the lump sum payment. Typically, people ask for the account to be paid in full and closed. You may find a debt settlement letter template here.

If you want to terminate an existing contract, such as a lease, explain why you want to end the contract. E.g., you lost your job. If the contract has a termination provision or a particular law applies favorably to your position, reference it clearly and explain how it applies.

No matter the purpose for the settlement letter, keep your reasoning concise.

Ask for a Signed Agreement

Close the letter by asking the other party to send you a signed agreement if they accept the terms of your proposal. Depending on the situation, you may also ask them to let you know their decision by a particular deadline. Once that’s done, thank them for their consideration and sign off on the letter.

It’s important to think this decision through before you put pen to paper. If you do decide to write a letter, use this guide to help you get started. However, if you don’t want the responsibility of writing your own letter, know that it’s perfectly acceptable to ask for help. We can take care of the hard work of negotiating for you. Get a case review with Attorney Chia-Fen Yu by calling (916) 306-5415 or contact us online.