Counter Settlement Proposal

Remember to mark it as WITHOUT PREJUDICE.

1. We refer to the above matter and to your letter dated 27 April 2020 (“Proposal”).

2. Our client maintains that the amount due and owing by your client to our client is RM222,861.89 (“Outstanding Sum”) as claimed by our client in the Writ and Statement of Claim dated 9 January 2020. Our client is therefore not agreeable to the Proposal.

3. Notwithstanding the above, our client is willing to settle the above matter amicably and instructed us to propose the following terms and conditions:-

(a) Your client should pay the sum of RM250,759.39 to our client as full and final settlement of the above matter. The particulars of the Settlement Sum are as set out in Annexure A and are briefly as follows:-

(i) Outstanding Sum of RM222,861.89; and

(ii) Interest at the rate of 5% per annum from the due date of the invoices until full and final settlement, amounting to RM27,897.50 (“Interest”),

(b) The sum of RM250,759.39 should be paid by your client to our client by 6 instalments as follows:-

(i) 1st instalment on 15 May 2020 RM41,385.91

(ii) 2nd instalment on 15 June 2020 RM42,157.28

(iii) 3rd instalment on 15 July 2020 RM42,388.87

(iv) 4th instalment on 15 August 2020 RM40,697.50

(v) 5th instalment on 15 September 2020 RM42,349.00

(vi) 6th instalment on 15 October 2020 RM41,780.83

(c) The payment stated in paragraph 3 (b) above shall be made by 6 post-dated cheques all of which shall be payable to our client and forwarded to us, as solicitors for our client, on or before 14 May 2020 (“Post-Dated Cheques”).

(d) In the event of default or non-payment of any one of the instalments as stated in paragraph 3 (a) to (c) above, the sum of RM222,861.89 (less actual amount paid) shall become immediately due and payable by your client to our client, and in this respect, our client shall be at liberty to commence legal proceedings against your client for the recovery of the sum of RM222,861.89 (less actual amount paid) together with interests, without further reference to your client, in which event, your client shall be fully and solely responsible for all further costs and interest incurred in the same.

(e) Parties should enter a Consent Judgment within 7 days of your client’s acceptance of paragraphs 3 (a) to 3 (d) above.

4. Kindly take note that the terms set out in paragraph 3 above are final and revert with your client’s agreement on the above terms on or before 11 May 2020, failing which this settlement proposal will automatically lapse. We look forward to your client’s favourable response.

5. For the avoidance of doubt, our client expressly reserves its rights.

6. Kindly acknowledge receipt of this letter and its enclosures.

How To Draft a Settlement Proposal

TIPS

1. Remember to mark the proposal as WITHOUT PREJUDICE. Without prejudice means it cannot be produced as an exhibit in Court (unless the maker voluntarily discloses it first).
2. Identify what your client wants, how he/she wants it.
3. Identify what your client can offer to your opponent's client, how your client wants to do it, and when.
4. Include dateline to accept offer!
5. No further claims.
6. Expressly reserve your client's rights.

SAMPLE CONTENT

We refer to the above matter, to our letter dated [when] / telephone conversation between [who] and [who] on [when].

Strictly on a without prejudice basis, we are instructed by our client to propose the following terms and conditions, as full and final settlement of the above matter:-     

(a) Your client should pay a sum of [amount] to our client, particulars of which are as follows:-

(i) A sum of [amount], being our client's initial share capital contribution.

(ii) A sum of [amount], being commission owed to our client for the period of [date]

(iii) A sum of [amount], being our client’s salary for the period of [date] to [date] or until date of the settlement.

(b) The payments stated in paragraph 2 (a) above shall be made by your client to us as solicitors of our client, on or before [date].

(c) In consideration of payment under paragraph 2 (a)(i) above, our client will transfer all its shares to a person nominated by your client. In this respect:-

(i) Kindly forward the relevant shares transfer form duly executed by your client to us for our client’s execution on or before [date]; and

(ii) Upon receipt of payment stated in paragraph 2 (a) above and within 5 days from the date of receipt of payment, we should forward the duly executed shares transfer form to you for your onward transmission to your client.

(d) In relation to paragraph 2 (a)(ii) above, your client is required to provide our client with the actual total number of sales which has been audited by your client’s auditor on or before [date].

(e) Our client should withdraw the above matter against your client with no liberty to file afresh and with no order as to costs.

(f) The above terms shall constitute full and final settlement of all claims, rights, actions and/or recourse that our client may have against your client, and your client may have against our client.

3. Kindly revert with your client’s agreement on the above terms on or before [date], failing which this settlement proposal will automatically lapse. We look forward to your client’s favourable response.

4. For the avoidance of doubt, our client expressly reserves all its rights.