Insights

Checklist: key checks before signing a settlement agreement

2 min read · Editorial oversight: Avv. Federico Papa

This checklist is an operational tool for legal professionals immediately prior to the execution or exchange of a settlement agreement. Its purpose is to verify compliance with the validity requirements set forth in Articles 1965 and 1966 of the Italian Civil Code and the fulfillment of the written form requirement under Article 1967 c.c.

In brief

Reviewing a settlement agreement under Art. 1965 c.c. requires verifying the validity requirements set forth in Articles 1965 and 1966 c.c. and compliance with the written form under Art. 1967 c.c. The agreement must include reciprocal concessions to prevent reclassification as a unilateral waiver or acknowledgment of debt. Signatories must possess full capacity to dispose of rights, and the agreement must not involve non-disposable rights or mandatory provisions, under penalty of absolute nullity. Written form is required ad substantiam for real property rights pursuant to Art. 1350 c.c.

1.
Verify the reciprocity of concessions
Verify that the agreement provides for reciprocal concessions as required by Art. 1965 c.c. In the absence of reciprocity, the instrument may be reclassified as a mere unilateral waiver or acknowledgment of debt.
Related practical guide: How to draft a settlement agreement under Art. 1965 c.c. with AI
2.
Verify the availability of rights
Ensure that the subject matter of the dispute does not involve non-disposable rights under Art. 1966 c.c. Settlement agreements concerning rights arising from family relationships or mandatory legal provisions are subject to absolute nullity.
3.
Check the written form requirement
Verify that the agreement is executed in writing if it concerns real property rights under Articles 1350 and 1967 c.c. The absence of the written form required ad substantiam renders the settlement void.
4.
Define the subject matter of the dispute clearly
Check that the recitals clearly describe the dispute that the parties intend to settle. Indeterminacy of the subject matter prevents establishing the exact preclusive scope of the agreement.
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5.
Verify the capacity to dispose of rights
Ensure that the signatories have full capacity to dispose of the rights covered by the settlement, as prescribed by Art. 1966 c.c. Lack of capacity renders the agreement invalid.
6.
Check the certainty of amounts and deadlines
Verify the accuracy of the calculations and the clarity of the performance terms set out in the obligations. Ambiguity regarding amounts or due dates may generate further disputes during enforcement.
7.
Check consistency between recitals and clauses
Ensure that the operative clauses cover all claims referred to in the recitals. This guarantees that the settlement fully fulfills its function of preventing litigation under Art. 1965 c.c.
8.
Verify the completeness of signatures
Check that all named parties have signed the instrument. Signature is necessary and sufficient to perfect the agreement, without prejudice to the requirement of a public deed or authenticated private agreement for the registration of real estate settlements.

Editorial oversight: Avv. Federico Papa·ICAM

Frequently asked questions

What happens if the settlement does not provide for concessions from both sides?

In the absence of reciprocity, the instrument does not constitute a settlement agreement under Art. 1965 c.c. and may be reclassified as a simple unilateral waiver or acknowledgment of debt, thereby losing the legal protections typical of a settlement agreement.

Is it possible to settle a non-disposable right?

No, Art. 1966 c.c. provides for the nullity of the settlement if the rights subject to dispute are removed from the parties' disposal by law or by their intrinsic nature.