The Limits of “Settlement” Disclaimers

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Lawyers love slapping the expression “For Settlement Purposes Only” (and/or “Confidential”) on correspondence with other attorneys, especially if a demand letter has been sent. A demand letter, also sometimes referred to as a nasty-gram, is a request from one party to another to cease doing something, pay something, acknowledge something, etc. Parties without counsel will typically do one of two things in response to such letters: (A) Panic or (B) Throw them in the garbage. Should they have representation, however, it is not uncommon for their counsel to send back a reply telling the other party’s lawyer to either buzz off or, absent that, propose some sort of settlement—and that is where the magic language comes in.

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