In a civil case, what differentiates a settlement from a judgment?

• A. A settlement is issued by a court; a judgment is agreed by both parties
• B. A settlement is penal; a judgment acquits
• C. A settlement is agreed upon by both parties, whereas a judgment is issued by a court
• D. A settlement requires a jury; a judgment does not

Answer: (C)

The main idea is that the way the dispute is resolved differs: a settlement comes from the parties’ mutual agreement to end the case, while a judgment is a formal ruling the court issues after evaluating the evidence.

A settlement is negotiated and agreed upon by both sides. They decide the terms—such as money to be paid or actions to be taken—and once those terms are signed, the case can be dismissed and the settlement becomes a binding contract between the parties. Because it’s a contract created by the parties themselves, it reflects their negotiated resolution rather than a court finding.

A judgment, on the other hand, is the court’s decision. After a trial or a motion, the judge (or jury, if a jury trial is involved) determines who is liable and what remedy or damages must be provided. It’s an official court order that resolves the dispute and can be enforced as a matter of law.

That’s why the correct understanding is that a settlement is agreed upon by both parties, whereas a judgment is issued by a court.