What happens if a settlement agreement isn’t paid on time?

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Has your settlement agreement not been paid on time? In many cases, this is a significant amount of money that any individual would want to receive as the amount has already been agreed in a legally binding contract.

To help both businesses and employees understand their options following failure to pay settlement agreement, we explain some of the key risks associated with either refusing to pay the settlement agreement sum or sending it later than agreed.

What are the risks of failing to pay a settlement agreement?

It’s uncommon for an employer not to abide by the settlement agreement terms, and especially for them to fail to pay the agreed amount of compensation on time, as this would constitute a breach of contract –a violation that the employee can take the company to court for.

For a company, the biggest risk of failing to pay a settlement agreement is therefore ending up in court – the very circumstance that they were attempting to avoid by using a settlement agreement.

However, the consequences of breaching the terms of a contract do vary according to specific circumstances and in many cases, more litigation between the parties will occur to come to a more amicable arrangement.

However, if all the parties involved cannot reach a resolution through more litigation, the employee concerned may decide to pursue court action.

What to do if settlement agreement has not been paid on time

Following the company’s failure to pay the settlement agreement, it’s also important to know what your options are as an employee.

Put simply, regardless of whether the settlement agreement was not paid on time, or it wasn’t paid at all, the employee should still be able to claim breach of contract.

To do this, they’ll need to contact the solicitor that signed off the agreement and state their desire to enforce the terms of the contact – including payment and when the sum should have been paid.

To increase their chances of a successful claim, they should be able to prove the existence of a legally binding contract and the fact that it’s been breached as a result of the other party not abiding by the agreed upon terms.

On top of this, they should also be able to demonstrate that they’ve suffered a loss and require compensation, also due to the other party breaching the terms of the contract.

Having a solicitor act on your behalf and approach the company with this evidence can often lead to more internal litigation and then payment. If they still refuse to pay, however, you may be able to take them to county court by claiming breach of contract.

Expert settlement agreement solicitors

At Freeman Jones Solicitors, we offer our clients a wide range of dedicated settlement agreement services, helping you to resolve important matters and move on with your professional career or company.

With 20 minutes of completely free legal advice, our team can learn more about your specific settlement agreement enquiry and advise whether you need a solicitor.

To speak to a member of our team today, simply give us a call on 01244 506 444. We also welcome email enquiries sent to info@fjsolicitors.co.uk as well as enquiries submitted using our online contact form.

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Author Colin Freeman View Profile
Colin qualified as a solicitor in 1998. He specialises predominantly in family law, litigation / dispute resolution, wills, probate and settlement agreements and has notable cases reported in the Court of Appeal and High Court.
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