North Dakota Settlement Agreement

Introduction

Key Things to Know

1. 1

   In North Dakota a settlement agreement is a binding contract that resolves a dispute when one side signs a release of claims for consideration, but North Dakota Century Code Section 9-13-02 limits a general release to known claims unless the release expressly waives Section 9-13-02, so a release meant to close the matter for good quotes and waives that section. Review every term first, because a signed release is hard to undo.

2. 2

   North Dakota is one of the states that codifies the unknown-claims rule. Century Code Section 9-13-02 says a general release stops at the claims you know or suspect when you sign; to surrender claims you have not yet discovered, the release has to waive that section by name. Skip the waiver and any claim you were unaware of stays alive (N.D.C.C. Section 9-13-02).

3. 3

   A child's claim cannot be compromised on the parents' say-so alone. A North Dakota court has to approve it, and the court must appoint a guardian ad litem for a minor who is not otherwise represented (North Dakota Rules of Civil Procedure, Rule 17(b)). No dollar cutoff applies; the court reviews the deal and decides how the funds are safeguarded.

4. 4

   Like any North Dakota contract, a release binds only if consideration supports it. That value is normally the settlement payment or an exchange of mutual promises and releases. Be explicit about what each side contributes, since a release handed over for nothing can be set aside for lack of consideration.

5. 5

   You can keep a North Dakota settlement quiet. The state has passed no law that voids confidentiality in harassment or discrimination settlements, so a clause agreed after the claim arises is generally enforceable, though the Human Rights Act still prohibits retaliation. Bear in mind the federal Speak Out Act, which reaches only pre-dispute nondisclosure and non-disparagement agreements in sexual-assault and sexual-harassment cases.

6. 6

   Look for a clause explaining that the payment settles a disputed claim and admits no fault. North Dakota accepts this as customary and enforceable, so a party can resolve the matter without conceding it did anything wrong.

7. 7

   Enforcement tracks the case posture. If a lawsuit is already pending, a North Dakota party can file a motion to enforce the settlement in that action and have the court order compliance. If nothing was ever filed, the settlement is enforced as a contract through a suit for breach seeking damages or specific performance.

North Dakota Requirements for Settlement Agreement

• Release of Claims and the Section 9-13-02 Waiver

  The release of claims is the heart of the settlement. In North Dakota a general release covers only the claims the releasing party knows or suspects at signing. To also give up unknown or unsuspected claims, the release must expressly waive Century Code Section 9-13-02; without that waiver, claims the party did not know about survive the release. Quote the Section 9-13-02 waiver in full and name who is released.

• Court Approval for a Minor's Settlement

  If a party is a minor, a minor's claim can be compromised only with court approval, and the court must appoint a guardian ad litem for a minor not otherwise represented (North Dakota Rules of Civil Procedure, Rule 17(b)). North Dakota sets no fixed statutory dollar threshold; the court reviews the compromise for fairness and directs how the proceeds are held until the minor turns 18.

• Consideration Makes the Release Binding

  A release is a contract, so it needs consideration to bind. The settlement payment, or the parties' mutual promises and mutual releases, usually supplies it. State plainly what each side gives, because a release for nothing in return can fail for lack of consideration under North Dakota contract law.

• Confidentiality and Harassment Settlements

  You can keep a North Dakota settlement confidential. North Dakota has no statute that voids confidentiality in harassment or discrimination settlements, so a clause reached after a claim arises is generally enforceable, though the Human Rights Act bars retaliation. The federal Speak Out Act limits pre-dispute nondisclosure and non-disparagement agreements in sexual-assault and sexual-harassment matters, so account for that federal rule.

• 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 North Dakota 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 North Dakota Settlement

  If the dispute is in pending litigation, North Dakota lets a party enforce a settlement by filing a motion to enforce in that action, and the court can order the breaching party to comply. A settlement reached outside a lawsuit is enforced like any other contract, by suing for breach and seeking damages or specific performance. Say in the Agreement which path applies.

• 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 release later fails to cover what the parties expected.

• Payment Terms and North Dakota Governing Law

  Set out the settlement amount, the due date or payment schedule, and how a missed payment is handled, then state that North Dakota 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.