A settlement agreement is a legally binding contract between two or more parties to resolve a dispute without going to court. It typically outlines the terms and conditions agreed upon by the parties, including any compensation or actions that need to be taken. These agreements are often used in various contexts, such as employment disputes, personal injury claims, or contract disagreements. The main advantage of a settlement agreement is that it can save time and money for all parties involved. By reaching a resolution outside of court, parties can avoid lengthy legal battles and the uncertainty of a trial outcome. Once signed, the agreement usually prevents either party from pursuing further legal action on the same issue.