Settlement agreement: goods and services

Simple agreement to negotiate the terms on which a supplier will accept part payment in acknowledgment of the delivery of faulty goods or services. Suitable only for use between businesses.
Suitable for use in: England & Wales and Scotland
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About this document

This Settlement and Release agreement (often called a compromise agreement) is suitable where the supplier has delivered unsatisfactory (faulty or unsuitable) goods or services and has agreed to settle for a specified and reduced final payment.

As drawn, it provides for either payment to be made by the customer and for the goods or services to remain with the customer, or for the supplier to remove the goods or services and for the customer to pay nothing. Either way, there is flexibility for both parties.

This compromise agreement effectively overwrites any previous agreement between the parties - whether written or verbal.

This agreement is suitable between businesses only. If one of the parties is a consumer, statutory rights set down in the Sale of Goods Act 1979 and the Sale of Goods and Services Act 1982 take precedent over any agreement such as this.

Application and features

  • Very flexible to suit the requirements of either or both parties;
  • Protects both sides;
  • Suitable for use in the UK, Europe or internationally;
  • Suitable between businesses.


  • Appropriate legal provisions - warranties, exclusions, indemnities;
  • Terms of settlement - how much is to be paid, when, how and by whom;
  • Who will collect the goods and when (if appropriate);
  • Successors and assigns;
  • Other provisions to protect your interests.

This document has been drawn by Rakesh Taneja, unconnected with Net Lawman. Rakesh Taneja will welcome your contact for further legal help. There may be a charge for Rakesh Taneja services.

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