Mediation heads of terms should state clearly whether the parties intend an immediate settlement or a proposal awaiting a fuller agreement. Do not sign on the assumption that a short document is harmless. Its effect depends on its wording and the surrounding legal circumstances, not simply its heading.
Ask the binding-status question in the room
Before the session ends, ask the lawyers to explain what would be binding on signature and what remains conditional. A document can contain both immediately operative obligations and points requiring further agreement. If the intention is to wait for a complete agreement, the drafting should accurately express that intention.
The Law Society’s Mediation Scheme describes written, signed settlement agreements under its scheme as binding. That does not mean every draft produced during every commercial mediation is automatically a concluded settlement. Identify the actual document and process.
Check the parties and signing authority
List the exact company names and any directors, guarantors or related entities intended to be included. Verify who has authority to commit each party and whether any approval is still needed. Do not use “the group” where the settlement needs obligations from identified legal entities.
For example, a supplier and customer may agree a payment plan, but a director’s personal guarantee is also in issue. If the director is not a party to the proposed release, ask what is actually being settled. The mediator’s summary is not a substitute for that review.
Resolve the terms most likely to cause a second dispute
| Provision | Question to settle |
|---|---|
| Payment | Amount, currency, instalment dates and recipient |
| Release | Who is released, from which claims and when |
| Proceedings | What happens to the existing case and its costs |
| Default | Notice, any cure period and agreed consequences |
| Remaining documents | Who prepares them and whether approval is a condition |
Where payment will take time, distinguish an immediate release from a release after performance. Do not leave a material difference unresolved in the hope that the final drafter will infer a shared intention.
Keep settlement formation separate from court enforcement
Our mediation-before-litigation guide covers the wider dispute-resolution setting. A settlement contract and an order of court are different things. If an order is intended, ask the lawyer which available procedure applies and what further steps or conditions must be satisfied.
Our consent judgment guide addresses recording a company settlement for enforcement. Do not assume that signing heads of terms has itself entered a judgment, discontinued proceedings or varied a court deadline.
Leave with a controlled completion plan
Keep the final signed version and distinguish it from earlier drafts. Record responsibility for each payment, approval, filing and document. Diarise continuing court directions until the appropriate procedural step is confirmed. If a disagreement emerges over what was signed, preserve the documents and obtain advice before alleging breach or resuming contested steps.
For related company questions, see our company law guides.
Need help with commercial mediation settlement terms?
If your company, or you as a director or shareholder, is dealing with commercial mediation settlement terms, contact the Raffles Corporate Services team at [email protected] or on WhatsApp at +65 8501 7133 or +65 9018 0072. We will help you understand the documents and deadlines. Where your matter needs a lawyer, we will refer you to a firm on our panel of Singapore law firms that handles commercial disputes and settlement agreements. Raffles Corporate Services is a corporate services provider, not a law firm, and this article is general information, not legal advice.
The Raffles Corporate Services Editorial Team, Raffles Corporate Services