In a declaratory judgment action, what does the court do?

In a declaratory judgment action, the court primarily seeks to clarify the legal rights and obligations of the parties involved without necessarily resolving the entire underlying dispute. This type of action is utilized when there is uncertainty regarding the legal relations among the parties, and the court's decision serves to provide clarity.

By deciding the legal rights of both parties, the court essentially puts forth a formal statement on how the law applies to the situation at hand. This can help prevent further litigation by delineating the rights, duties, or obligations of the conflicting parties, enabling them to understand where they stand legally.

While resolving the case could be seen as a component of a declaratory judgment action, the main focus is on the legal interpretation rather than a final resolution of all issues. An important distinction is that the court does not issue a non-binding decision; a declaratory judgment generally carries legal weight, providing parties with an authoritative statement about their rights. Likewise, while making judgments about unfair settlement practices can sometimes be part of litigation, it is specifically outside the scope of what a declaratory judgment typically addresses.