What is an out-of-court settlement?

An out-of-court settlement refers to a resolution to a dispute that is reached by the parties involved without the need for a formal court trial. This typically occurs when the parties negotiate terms that satisfy both sides, allowing them to avoid the time and costs associated with litigation. By coming to an agreement before the case goes to court, the parties maintain more control over the outcome and can save resources. In many cases, out-of-court settlements can lead to mutually beneficial terms that might not be achievable through a judicial ruling, which can often be unpredictable.

The other options refer to various aspects of legal processes that are distinct from an out-of-court settlement. These involve formal judicial actions and court proceedings, which are not applicable to the concept of resolving issues through negotiation rather than litigation.