Louisiana Settlement Agreement

Introduction

Key Things to Know

1. 1

   In Louisiana a settlement agreement is a compromise: one side gives consideration and the other releases its claims, and it must be in writing or recited in open court. Louisiana has no Section 1542-style unknown-claims statute, so review every term before you sign.

2. 2

   Louisiana has no Civil Code Section 1542-style unknown-claims statute. A Louisiana compromise settles only the differences the parties clearly intended to settle, including the necessary consequences of what they express (Civil Code article 3076), and it must be made in writing or recited in open court (article 3072). Broad, clear language is what makes a compromise close the matter.

3. 3

   If a minor is a party, a person with parental authority may compromise the minor's claim without court approval only when the sum or value to be paid or received does not exceed 15,000 dollars, excluding court costs, attorney fees, and other expenses (Louisiana Revised Statutes Section 9:572). A larger compromise needs court approval through the tutorship process.

4. 4

   In Louisiana civil law the parties' reciprocal concessions and lawful cause support the compromise; the payment and mutual concessions supply what other states call consideration. State plainly what each side gives, because a compromise for nothing in return can fail for want of cause.

5. 5

   You can generally keep a Louisiana settlement and its amount confidential. Louisiana makes a nondisclosure clause an employer requires before a harassment or hostile-work-environment dispute judicially unenforceable, but it still allows a confidential settlement entered into after a claim or report is made (Louisiana Revised Statutes Section 9:2717.3).

6. 6

   Most settlements include a no-admission-of-liability clause stating that the payment settles a disputed claim and is not an admission of fault. This is standard and enforceable in Louisiana; it lets a party resolve a case without conceding wrongdoing.

7. 7

   A Louisiana compromise precludes the parties from bringing a later action based upon the matter that was compromised (Civil Code article 3080), so it operates with the force of a final resolution. A breach is enforced as a contract, and a compromise in a pending case can be enforced by motion.

Louisiana Requirements for Settlement Agreement

• Release of Claims and the Compromise Scope

  The release of claims is the heart of the settlement. Louisiana treats it as a compromise that settles only the differences the parties clearly intended to settle (Civil Code article 3076) and that must be in writing (article 3072). There is no Section 1542-style unknown-claims statute, so state clearly that the release covers all claims known and unknown arising out of the dispute, and name who is released.

• Court Approval for a Minor's Compromise

  If a party is a minor, a person with parental authority may compromise the claim without court approval only when the sum or value to be paid or received does not exceed 15,000 dollars, excluding court costs, attorney fees, and other expenses (Louisiana Revised Statutes Section 9:572). A larger compromise needs court approval through the tutorship process to protect the minor.

• Cause and Reciprocal Concessions

  A Louisiana compromise rests on the parties' reciprocal concessions and a lawful cause, which serve the role consideration plays in other states. The settlement payment and mutual concessions supply it. State plainly what each side gives up, because a compromise for nothing in return can fail for want of cause.

• Confidentiality and the Harassment Limit

  You can keep the settlement amount and terms confidential in Louisiana once a claim exists. Louisiana makes a nondisclosure clause an employer requires before a sexual-harassment or hostile-work-environment dispute judicially unenforceable, but allows a confidential settlement entered into after a claim or report is made (Louisiana Revised Statutes Section 9:2717.3). Draft the clause around that limit.

• No Admission of Liability

  Include a no-admission-of-liability clause stating that the payment settles a disputed claim and is not an admission of fault by any party. This is standard and enforceable in Louisiana and lets a party resolve a matter without conceding wrongdoing. Pair it with the recital that the Agreement is a compromise of a disputed claim.

• Enforcing a Louisiana Compromise

  A Louisiana compromise precludes the parties from bringing a later action based upon the matter that was compromised (Civil Code article 3080), so it operates with the force of a final resolution. If the other side does not perform, enforce it as a contract; where the dispute is already in a pending lawsuit, ask the court to enforce the compromise and enter judgment on its terms.

• Identify the Parties and Recite the Dispute

  Name every party to be bound and released, including agents, employees, and successors where intended, and recite the dispute clearly (the claim, incident, or case number if a lawsuit is pending). A vague description of the dispute or a missing party is a common reason a compromise later fails to cover what the parties expected.

• Payment Terms and Louisiana Governing Law

  Set out the settlement amount, the due date or payment schedule, and how a missed payment is handled, then state that Louisiana law governs the Agreement. Consider a tax or wage allocation where the settlement resolves an employment or injury claim, since how a payment is characterized can affect its tax treatment. Confirm allocation with a tax professional before signing.