Laws create private rights, and those rights can be contracted-away. Say the securities laws create a private right of action for people who make misrepresentations on a prospectus. If you're an investor who buys a security from a shady issuer, you can choose to sue or not. The law just creates a right of action, it doesn't force you to use it. The law views contracts to give up that right of action as being just a part of your discretion in exercising that right.
Obviously a contract can't protect a company from, say, criminal enforcement by the SEC, because that's a right held by the government, not the injured individuals.
> Laws create private rights, and those rights can be contracted-away.
Maybe in your country.
In Australia, at least, they can not.
When going ice skating those signs that say "Skaters do so at their own risk" mean nothing in Australia. There are certain rights an individual can not sign away.
The US also holds certain rights that cannot be signed away, some of which hold for the whole US and some of which are per state. IANAL, but as I understand it the US does allow you to waive your right to pursuing certain types of claims in court (and that waiver can potentially be overturned on a case-by-case basis) but only by allowing arbitration instead. Arbitration is, in the most basic way of speaking, private court with different rules in effect. This is allowed because the US specifically allows it. In fact, the US has generally been a strong advocate of arbitration.
If you can't waive your rights, you can't even settle out of court. That's what a settlement is -- an agreement to waive right to due for some payment.
In the case of basic rights, why would you want to settle out of court?
i.e. if the ice skating rink from the above example is negligent in their requirement to provide a level of care, then they need to be punished by a court.
How is it hard to understand? Settle does not in any way mean "forgive" or "forget" or "waive."
Court: a year (or more) of legal fees, proceedings, headache, stress, and pain in the ass. Settle: Get less cash, be done with it.
In both cases, you're being compensated for the violation of your basic rights. In one of them, you take up the court's time and pay for it dearly in order to make your point publicly and to potentially get more money. In the other, assuming you're trying to sue someone without too much hubris such that they're willing to settle, the affair is much tidier, but generally less bitter for the loser, too.
The legal terminology is a little confusing given the common usage of the word "right." The option to sue that arises under some law as the result of a specific injury is a "right." The compensation for that injury from a successful suit is the "remedy." You can of course bargain away your remedy, but winning a suit and paying it over to someone else, but that's not what I was referring to.
Obviously a contract can't protect a company from, say, criminal enforcement by the SEC, because that's a right held by the government, not the injured individuals.