Out-of-court settlement
An out-of-court settlement is the resolution of a dispute by agreement of the parties rather than by a judge's decision. It can be reached at any time, before or after a lawsuit starts, and is usually recorded in a settlement agreement and a release, with any lawsuit then dismissed by consent.
How BC law treats it
A settlement is a binding contract once the parties agree on its essential terms, even if formal documents are still to be signed. Settlement communications are generally protected by settlement privilege and cannot be used as evidence of liability.
What it means for your business
Most business disputes settle, and a well drafted settlement and release gives certainty and closes the matter.
Risks and common mistakes
Agreeing to terms in an email exchange can create a binding settlement before you intended, so state clearly when an offer is not final.
For the full explanation, see our entry on General release.
General information about British Columbia and Canadian law, current to October 2026. It is not legal advice.
