Duhaime's Law Dictionary

Settlement Definition:

An agreement, or the document which articulates the agreement, which sets or resolves rights.
An agreement which resolves, sometimes by compromise, but which in any event concludes a dispute or litigation.

Historically, a settlement dealt with real property, especially where it was a gift, and had to include some transition of the property into a trust.

Thus, in 1885 (Re Player), an English court wrote of a settlement in terms implying a trust:

"... a settlement, that is, a disposition of property to be held for the enjoyment of some other person."
Various statutes have taken the term and assigned to it a definition specific to the statute.

Thus, the term has evolved and most jurists stay away from assigning to it any definitive definition.

In 1942, in Re Bozanich, Canada's Supreme Court wote:

"It need not be stated that all conveyances or transfers of property are not settlements; nor can it be said that a settlement is a settlement because it happens to be a conveyance or a transfer."
In 1999, the Newfoundland Court of Appeal wrote, in McCabe:
"A settlement agreement does not require any formalities to be valid. Accordingly, a contract of settlement is capable of being formed by means of a telephone conversation if the requisite elements of offer, coincident acceptance, consideration, intention to create legal relations and certainty of terms are present."

When husband and wife resolve their differences by way of a separation agreement, it is often referred to as a marriage settlement.

Often, the term is used in the phrase final settlement, which is redundant unless proceeded by interim agreements. Further, in the the phrase full and final settlement, the use of the word full can be taken to resolve all issues in dispute such that where an asset in dispute is not covered by the full and final settlement, it can be taken as the property of the person to whom it previously belonged.

In the context of bankruptcy, Justice Tweedie of the Alberta Supreme Court (as it was then called), wrote in Re Cohen:

"The word settlement ... (in the bankruptcy act) means a disposition of property by the settlor either directly, or through the intervention of a trustee, for the benefit of the person on whose behalf the settlement is made, subject to such restrictions and conditions as to the retention of the settled property in its original form, or, in the case of money, as to the investment thereof, as may be imposed by the settlor. The retention of the property in some form is contemplated, the use and enjoyment thereof to be in accordance with the terms of the disposition. "


  • McCabe v Verge 41 C.P.C. 4th 62 (1988)
  • Re Bozanich 1942 S.C.R. 130
  • Re Cohen 7 C.B.R. 655 (1926)
  • Re Player 15 Q.B. 682 (1885, at page 686-687)

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