What is meant by a settlement in legal terms?

In legal terms, a settlement refers to an agreement between the parties involved in a dispute to resolve the matter without the need for a trial. This process allows the disputing parties to reach a mutually acceptable outcome, often involving negotiations where each side may compromise to some extent. Settlements can provide a more expedient resolution, reduce legal costs, and give the parties more control over the outcome compared to a court-imposed decision.

The concept of a settlement is particularly significant because it can occur at various stages during the legal process, including before formal litigation begins or even during a trial. It emphasizes the importance of negotiation and collaboration in the legal system, helping to alleviate the burden on courts and allowing parties to avoid the unpredictability of a trial verdict.