Study On The Settlement Contract

Essentially, the settlement contract is a consensus of the parties’ voluntary mutualconcession, in order to terminate or prevent a dispute. The establishment of thetheoretical system to settlement contract can establish a civil coordinate for variety ofsettlement agreements. Within the scope of autonomy of private law, the parties havereconciliation right to freely dispose matters. Both agreements reached by the onlyparties and non-litigious mediation agreements such as the people’s mediation, or eventhe settlement agreements reached in civil procedure，their common nature is asettlement contract. The core effectiveness of the settlement contract is the determinateeffect, and controversies between ’deklarativ’ and ’konstitutiv’ couldn’t reflect the coreeffect of settlement contracts. The determinate effect contains double meanings, and thereconciliation matters defined by the parties’ concessions play a substantive role todecide the range of the determinate effect. There are special rules on the validity ofsettlement in the premise of applying the general principles of contracts.When attackinga contract with a defect of ’mistake’, we should make a distinction between the basis ofcompromise and the reconciliation matters. The settlement contract in civil procedureowns a dual nature and double effects between the substantive law and procedural law.To eliminate the drawbacks of ’the parties’ reconciliation’, we should reshape thevalidity of the litigation settlement as a focal point. Clarify the essence of compromiseand mediation agreement being a contract, purify the consensus of the parties andperfect the mechanism of procedural safeguards can build a positive interaction amongthe settlement, mediation and litigation. We should define the settlement contract as akind of typical contract in Chinese Civil Code and stipulate its constituent elements,effectiveness and limitations. Relying on the judicial confirmation process，we shouldestablish a mechanism to gain procedural validity quickly, and it’s an effective way tostimulate functions of settlement.