What is a High-Low Agreement? A Comprehensive Legal Overview
Definition & Meaning
A high-low agreement is a type of settlement arrangement used in legal cases, particularly during trials. This agreement allows the parties involved to establish a minimum and maximum amount of damages that the defendant will pay the plaintiff, depending on the jury's award. Specifically, if the jury awards damages below the agreed minimum, the defendant pays that minimum amount. Conversely, if the jury awards damages above the maximum, the defendant only pays the maximum amount. This arrangement helps both parties avoid the risk of an extreme verdict, providing a level of certainty in uncertain legal outcomes.
Legal Use & context
High-low agreements are commonly used in civil litigation, particularly in personal injury and contract disputes. They serve as a strategic tool for both plaintiffs and defendants to mitigate the risks associated with trial outcomes. By agreeing to a high-low settlement, parties can avoid the unpredictability of jury decisions and ensure a more controlled resolution. Users can manage such agreements using legal templates available from US Legal Forms, which are drafted by experienced attorneys.
Real-world examples
Here are a couple of examples of abatement:
Example 1: In a personal injury case, the plaintiff and defendant agree on a high-low settlement where the minimum amount is $50,000 and the maximum is $150,000. If the jury awards $40,000, the defendant pays $50,000. If the jury awards $200,000, the defendant pays $150,000.
Example 2: In a contract dispute, the parties agree to a high-low arrangement with a minimum of $20,000 and a maximum of $80,000. If the jury awards $30,000, the defendant pays $30,000. If the jury awards $90,000, the defendant pays $80,000. (hypothetical example)