| Severance: Many states require that certain | | | | want the liability, and I enjoy being able to write |
| provisions be included and can rule clauses invalid, | | | | about my exploits. Such a provision may read |
| as the state-specific requirement serves to | | | | something like, "The Parties agree that they will |
| demonstrate. That's why severance provision is | | | | keep the terms of this Agreement completely |
| useful. Not even veteran attorneys can know | | | | confidential and that they will not disclose any |
| every clause that would or wouldn't be | | | | information concerning this Agreement or its |
| permissible, so they often use the following | | | | terms to anyone, except to their legal counsel, |
| severance clause: "If any provision of this | | | | accountants, taxing authorities, or other persons |
| Agreement is held to be invalid by a court of | | | | to whom disclosure of this Agreements terms is |
| competent jurisdiction, that provision shall be | | | | required by law, court order, or subpoena." |
| deemed to be severed and deleted, and neither | | | | Mutual release: The title of any settlement |
| that provision, nor its severance and deletion, shall | | | | document should read, "Mutual Settlement and |
| affect the validity of the remaining provisions." | | | | General Release." Any release should work both |
| Such a provision keeps the heart of the | | | | ways, for example: "Except as to the rights and |
| document intact. | | | | liabilities as created by this Agreement, Plaintiff |
| Execution: I like having both sides notarize the | | | | hereby releases, acquits, and discharges |
| agreement so as to avoid any claims of forgery. | | | | Defendant and its past, present, and future |
| "This Agreement may be executed | | | | officers, directors, shareholders, employees, |
| simultaneously in two counterparts, each of which | | | | agents, attorneys, affiliates, parents, successors, |
| shall be deemed an original and all of which | | | | assigns, heirs, subsidiaries, affiliates and parent |
| together shall constitute but one and the same | | | | entities, partners, insurers, and representatives of |
| instrument. Each Party's signature shall be | | | | and from any and all claims, liabilities, causes of |
| authenticated by a notary public." Some creditors | | | | action, administrative violations, regulatory |
| will insist on notarization, while others will insist on | | | | violations, actions, costs, and attorneys fees, |
| the lack of it. I prefer it, though I almost never | | | | either accrued or unaccrued, known or unknown, |
| insist. Insist if you feel you must. | | | | but limited to all claims made in the Action. |
| Attorney's fees: "In the event that a party shall | | | | Defendant likewise releases Plaintiff of all claims |
| fail to comply with or perform any condition or | | | | relating to the account or the Action. This Mutual |
| agreement hereof promptly at the time and | | | | Release shall not extend to the obligations created |
| manner specified herein, the defaulting party shall | | | | by this Agreement or to any claim or cause of |
| thereafter pay all costs and expenses, including | | | | action based in whole or in part upon a |
| reasonable attorney's fees and costs, incurred by | | | | communication to a consumer reporting agency |
| the nondefaulting party in the enforcement of said | | | | after the date of this agreement." |
| nondefaulting party's rights." In America, generally | | | | Notification to third parties: If there are multiple |
| each party pays its own way in a lawsuit in the | | | | parties reporting, then be sure to include in any |
| event of a contract dispute, unless the contract | | | | agreement the stipulation that "the [other party]" |
| specifically calls for attorneys fees. This clause | | | | will be notified to delete the account from its |
| permits the recovery of attorney's fees if one | | | | database and stop reporting the account to the |
| party breaches the contract and the other party | | | | bureaus. A collection agency, if it doesn't own an |
| must sue in order to remedy that breach. | | | | account, will report it as indicated by the creditor. |
| Confidentiality: This is simply a nondisclosure | | | | If a third party (such as a collection agency) has |
| provision, whereby both parties agree not to | | | | purchased the debt, then the original creditor has |
| disclose the terms of the settlement. Often | | | | no control over what the collection agency will |
| creditors will try for this, and some will insist on it. | | | | report, however. |
| I try to avoid it whenever possible, since I don't | | | | |