What a TCPA settlement agreement contains, clause by clause

A TCPA settlement agreement is a short contract, usually three to six pages. It does one thing: the person with the claim gives it up in exchange for payment. Every clause either defines what is given up, defines the payment, or protects one side if the other does not perform. Here is what each clause does and what to check before you sign.

The parties

The releasing party is the person who received the calls, or the entity that holds their claim by assignment. The released party is you. Check that your legal entity name is exact, and ask that the release extend to your officers, employees, agents and any vendor that made the calls for you. If a vendor is left out, the claim can be brought against them and they will look to you.

The recitals

A few sentences describing the dispute: the letter, the calls, the claim under 47 U.S.C. § 227 and, where relevant, Fla. Stat. § 501.059. Recitals are not operative, but check that they describe the right matter and do not contain admissions dressed as background.

The release

The clause that matters. A good release for you is broad on your side and specific on theirs: it releases all claims arising from calls or texts to the listed numbers during the stated period, known or unknown, under federal and state law. Check four things.

1. The numbers. Every number in the letter should be in the release, by list or by reference to an attached schedule.
2. The period. It should run from the earliest call to the date of the agreement, not just the dates in the letter.
3. The claims. All claims under the TCPA, the FCC's rules, state telemarketing statutes and any related theory. Not just "the claims in the letter".
4. The releasing party's assigns. If the claim was assigned to the sender, both the original recipient and the assignee should be bound.

No admission of liability

Standard, and you should insist on it. The agreement states that nothing in it is an admission by you of any violation or wrongdoing, and that the settlement is to avoid the cost and uncertainty of litigation. This clause is what makes "paying admits guilt" wrong.

Payment terms

Amount, method, date and payee. If paying in instalments: the schedule, the cure period after a missed payment, and the acceleration clause (what becomes due if you default). Make sure the release is effective on signing or on first payment, not only on the final payment, or the sender holds the full claim over you for the whole schedule. More on instalment terms.

Confidentiality

Usually mutual. Neither side discloses the terms or the amount except to lawyers, accountants, insurers and as required by law. Confidentiality keeps your business name out of anyone's marketing. Check whether it also stops you disclosing the settlement to a vendor you intend to pursue, and carve that out if so.

No-contact and compliance clauses

Some agreements add a promise that you will not contact the listed numbers again. Agree to it; you were not going to anyway. Some add a promise about future compliance. Keep those general. Do not accept a clause that makes a future unrelated violation a breach of this agreement.

Boilerplate worth reading

• Governing law and venue. Fine as long as it is a real jurisdiction and you understand where a breach would be litigated.
• Entire agreement. Means prior emails and calls do not count. So get every term into the document.
• Attorney's fees on breach. Common. Means a missed payment costs more than the payment.
• Severability, counterparts, electronic signatures. Standard.

Before you sign

1. Match the entity names on both sides to the registry.
2. Match the numbers in the release to the numbers in the letter.
3. Confirm the release is not conditional on the final instalment.
4. Confirm the no-admission clause is in.
5. Have the payment method ready and the money available on the date.