Signing example
Sign a debt settlement agreement online
A debt settlement agreement has to fix three numbers and one date beyond argument: what was owed, what will be accepted, and when it must arrive. This two page compromise settles a $9,400 joinery account for $6,500 paid by 30 October 2026, with the debtor initialling the terms behind an emailed code before the creditor's director countersigns.
The document, with its fields
The pages as a signer sees them, with the signature, name, title and date fields placed where each party has to complete them.
Debt Settlement Agreement
1. The parties
| Creditor | Larkspur Joinery Pty Ltd, ABN 72 640 118 935, of 14 Industrial Drive, Bayswater VIC 3153 |
|---|---|
| Debtor | Declan Moriarty, of 52 Wattletree Road, Ringwood East VIC 3135 |
2. Background
The Creditor built and installed kitchen and laundry joinery at the Debtor's home in March 2026 under a quote accepted on 11 January 2026. The Debtor paid the deposit and the first progress claim but did not pay the two invoices below, saying the laundry cabinets were installed three weeks late and two drawer fronts were the wrong colour. The Creditor replaced the drawer fronts in May 2026. The parties now want to settle the account without going to the Victorian Civil and Administrative Tribunal, and without either of them admitting the other's version of events.
3. The debt
| Invoice | Date | For | Unpaid |
|---|---|---|---|
| INV-2207-03 | 28 Mar 2026 | Kitchen joinery, installation claim | $6,850.00 |
| INV-2207-04 | 16 Apr 2026 | Laundry cabinets and final claim | $2,550.00 |
| Total the Creditor says is owing, including GST | $9,400.00 | ||
4. The settlement
| Pay to | Larkspur Joinery Pty Ltd |
|---|---|
| BSB and account | 063 118 · 1092 4476 |
| Reference | LJ-C-2207 SETTLE |
| Instalments | Not allowed. The $6,500.00 is paid in one amount. |
5. If the payment is late or short
If $6,500.00 has not been received in full by 30 October 2026, the settlement falls away. The full debt of $9,400.00 becomes payable again at once, less anything the Debtor has paid under this agreement, and the Creditor may recover it in the usual way. Any part payment is kept and credited against the debt. The Creditor will not agree a later date except in writing signed by its director.
6. Release on payment
When the Creditor receives $6,500.00 in full and on time, each party releases the other from every claim arising out of the quote, the joinery, the installation and the two invoices, whether known now or not. The Creditor will give the Debtor a written receipt and a statement showing the account at nil within 5 business days of the payment clearing.
7. The Debtor's warranty claim is settled too
The Debtor accepts the replacement drawer fronts and gives up any claim for delay or for the colour of the original fronts. This does not affect any statutory guarantee under the Australian Consumer Law that cannot be excluded, or the Creditor's ordinary warranty on the hardware for defects that appear after the date of this agreement.
8. No admission
This agreement is a compromise. Neither party admits liability or accepts the other's account of what happened, and neither may use this agreement as evidence that it did.
9. Confidentiality and general
The parties keep the terms of this settlement private, except to their advisers, a court or tribunal, or as the law requires. This agreement is the whole agreement about the debt and replaces any earlier offer. It is governed by the law of Victoria and may be signed electronically, in the order shown below.
10. Signing
The Debtor signs first. The Creditor's director countersigns after the Debtor, so the settlement figure above is binding on the Creditor only once both signatures are on this page.
Who signs what
- Declan Moriarty, debtor
- Initials at the foot of page 1, under the settlement terms · Signature and stamped date on page 2 · Verified by an emailed six digit code
- Sofia Lindqvist, director of the creditor
- Signature block on page 2: Name, Title, Company and a stamped Date · Email link
The signing journey
Step 1
Four fields, two people
The debtor gets initials on page 1 and a signature and date on page 2. The director gets one signature block beside them.
Step 2
Debtor first, behind a code
Sign in order is on, so only Declan is invited at send. His link asks for a six digit code emailed to him before the agreement opens.
Step 3
Initials under the late payment clause
His initials land at the foot of page 1, directly below the clause saying the full $9,400 comes back if $6,500 is late or short.
Step 4
The director countersigns
Sofia's invitation goes out when his signature lands. She types Director and the company name; Name fills from her recipient record and Date is stamped.
Step 5
Certified and sent to both
Her signature completes the envelope. The certified PDF goes to both parties, and the certificate prints the document hash as sent and the fully signed hash.
Every field, and who fills it
Declan Moriarty initials once at the bottom right of page 1, under the payment box, the bank details and the late payment clause, then draws his signature on page 2 with the date stamped beneath it. Sofia Lindqvist's block for Larkspur Joinery prints the role heading in capitals, her signature over a rule, then Name, Title, Company and Date lines. Every figure is printed in the PDF: the two invoices of $6,850 and $2,550, the $6,500 settlement, the BSB and account, and the reference LJ-C-2207 SETTLE.
How to adapt this envelope
A settlement paid in instalments replaces the single deadline with a short schedule and keeps the initials under it, since each missed instalment is a trigger. Where the debtor is a company, swap the debtor's signature and date for a signature block with Title and Company switched on. And where a creditor wants the debtor to confirm the amount in their own words, a text field on page 1 can take the figure typed by the debtor, which the sender cannot fill in for them.
Why the certificate matters here
A settlement is usually tested months later, when one side says the payment was late or the agreement never existed. The certificate of completion answers the second question: it records the envelope id, when it was sent and completed, both signers with their verification method, IP address and consent time, the hash of the document as sent and the fully signed hash. The two hashes show the agreement both parties received is the one both signed.
What makes this signing flow work
The figure sits above both signatures
Page 2 repeats the deal in one line, $9,400 settled for $6,500 by 30 October 2026, directly above the execution area. Neither party can later say the number they signed under was different.
The debtor signs first
A settlement is the creditor accepting less, so it should be the creditor's last act. With the order on, the director only sees a link once the debtor has committed, and her signature is what binds the business to the reduced figure.
Initials where the deal can fall over
Page 1 holds the clause that revives the full debt if payment is late. The debtor's initials sit directly under it, so a later claim that the condition was never pointed out is answered by the page itself.
Questions people ask
Is a debt settlement agreement binding when both sides sign electronically?
In Australia the Electronic Transactions Act 1999 recognises an electronic signature that identifies the person and shows their intention, by a reliable method, where the other party agrees to receive it that way. The settlement is then a contract like any other, enforceable on its terms.
Can the creditor's director sign from another city?
Yes. Each recipient gets their own link by email and signs on any device with a browser. Sofia's link only arrived once Declan had signed, because the order switch was on, and her signature, IP address and consent time are recorded against her own email address.
What does the fully signed hash on the certificate prove?
It is a sha256 fingerprint of the PDF after both signatures were stamped and before certification. Together with the document hash as sent, it shows what was uploaded and what both parties ended up signing. It is not a checksum of the downloaded file, so do not compare it against one.
Why give the debtor a one-time code and not the creditor?
The debtor is the person who might later deny signing, so his link needs a six digit code sent to his own inbox, valid for ten minutes. The director signs for the business that sent the envelope, so a plain email link to her company address is enough.
What if the debtor declines the settlement?
The envelope moves to declined and the creditor is emailed with any reason he typed. Nothing is binding, and the full $9,400 remains owing on the original invoices. The creditor can void the declined envelope and send a revised offer as a new one.
Does signing the settlement admit the debt was owed?
Clause 8 says the agreement is a compromise and neither party admits liability or accepts the other's account, which is common in settlements of a disputed debt. Whether a clause like that protects a party in a particular case is a question for a lawyer, not for the signing tool.
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