Settlement agreement
Review a settlement agreement before you sign
A settlement agreement ends your employment and your right to bring a claim, in exchange for a payment. In the UK it is not valid unless you have taken independent legal advice - which the employer normally contributes to. That contribution is the part most people do not realise is negotiable, along with almost everything except the headline number.
For employees offered a settlement agreement, in the UK and comparable regimes.
No account needed. You see the price before paying, and the report opens immediately after.
What we check in a settlement agreement
Every review of this contract type runs the full checklist, then reports what it found with the clause quoted and the line number.
- Whether the payment is genuinely additional to notice, holiday and contractual entitlements
- How much of the payment is tax-free and how much is taxable
- The scope of the claims being waived, and which claims cannot lawfully be waived
- Whether the employer contributes to your legal fees, and how much
- Non-disparagement - whether it binds both sides or only you
- Confidentiality of the agreement, and the carve-outs for family, advisers and regulators
- Whether existing restrictive covenants are reaffirmed, released or extended
- The agreed reference wording and who is bound to give it
- Treatment of unvested equity and the exercise window
- Clawback or repayment triggers if you breach a term
Red flags we see most often
These are the specific terms that turn a routine settlement agreement into an expensive one.
- A payment that merely equals your contractual notice and holiday entitlement
- One-way non-disparagement binding only the employee
- New or extended post-termination restrictions introduced in the agreement
- No carve-out permitting protected disclosures to a regulator
- A legal fee contribution too small to cover the advice the agreement requires
- Repayment of the whole settlement for any breach, however minor
- No agreed reference, or one described only as in line with company policy
What you get back
Not a summary of what the contract says. A list of what to change, and the wording to change it to.
Risk score and verdict
A calibrated 0–100 score with a one-line verdict. Clean documents score low — the score is only useful if it can say "this is fine".
Findings with the quote
Each issue names the clause, quotes it verbatim, explains the consequence in your contract's own numbers, and says how far it deviates from market standard.
Pasteable redlines
Replacement wording drafted for each issue, ready to send back to the other side.
What's missing
The standard protections for this contract type that your document does not contain.
Deadlines to calendar
Every date and trigger that costs you something if you miss it, with the consequence spelled out.
Negotiation playbook
Your asks in priority order, the reason to give for each, and the fallback position if they refuse.
Questions about settlement agreements
Do I have to sign a settlement agreement?
No. It is an offer. If you do not sign it you keep your contractual and statutory entitlements and your right to bring a claim; you simply do not receive the extra payment. The question is always what the additional money is worth against what you are giving up.
Who pays for the legal advice on a settlement agreement?
The employer normally contributes, because in the UK the agreement is not binding unless you have received independent advice from a qualified adviser who signs a certificate. If the contribution offered will not cover the advice, ask for more - it is a routine and usually successful request.
How much of a settlement payment is tax free?
Genuine compensation for loss of employment is often tax-free up to a statutory threshold, while notice pay, holiday pay and contractual bonuses are taxable. How your agreement labels each element matters, and getting the labelling right is part of what the advice is for.
Can I negotiate a settlement agreement?
Usually, and more often on terms other than the money: a larger legal fee contribution, an agreed reference attached as a schedule, mutual non-disparagement, release from a non-compete, and an extended equity exercise window all cost the employer little.
What is the difference between a settlement agreement and a severance agreement?
Largely terminology. Settlement agreement is the UK term and carries specific statutory requirements including independent legal advice; severance or separation agreement is the US equivalent, with its own consideration and revocation periods. Both buy a release of claims.
Related guides
Waiver of Claims in a Severance Agreement: What You Give Up
What a release of claims actually covers, which claims cannot be waived by law, and the terms worth negotiating before you sign the agreement.
Garden Leave vs Severance: Which One Is Better for You?
Garden leave keeps you employed; severance ends it. The difference decides your benefits, your equity, your restrictions and your right to sue.
Employment Contract Review Checklist: 21 Things to Check
The clauses that decide what happens if you leave, ranked by how often they cause real damage - with what is standard and what to ask for.
Review your settlement agreement now
$49, no account, about two minutes. See a complete sample report first if you want to judge the depth before paying — and if yours finds nothing you can act on, we refund it.
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