The main question to be examined in this article is how the law should treat a plea of mistake made by a party to a settlement of a disputed or disputable claim. There can be no doubt that the main policy of the law is to uphold a “settlement” or “compromise” reached by parties sitting in the very jaws of court proceedings. The basis of this public policy in favour of finality will be discussed in the second section of the article. But there are two major areas of uncertainty, which will provide material for the rest of the discussion. First, many overlapping and murky terms are used in the literature, such as “compromise”, “settlement”, “submission to honest claims” and “process of law”.1 These need to be clarified. The term “settlement” will be used as the main platform for discussion. It will be argued in particular that it is important to recognize the concept of an “implied settlement”. Once the factor of settlement is cleanly isolated, many leading decisions on “mistake”—namely, Huddersfield Banking Co. Ltd. v. Lister,2 Magee v. Pennine Insurance Co. Ltd.,3 Kelly v. Solari,4 Norwich Union Fire Insurance Soc. v. William H. Price Ltd.5 and Bell v. Lever Bros. Ltd.6—take on a new aspect. Each of these cases should be reviewed in the light of this factor.