Settled dispute outlined by contract (8)
I believe the answer is:
defrayed
'settled' is the definition.
(I've seen this before)
'dispute outlined by contract' is the wordplay.
'dispute' becomes 'fray' (fray can mean dispute or conflict).
'outlined by' is an insertion indicator.
'contract' becomes 'deed' (I've seen this in another clue).
'fray' inserted inside 'deed' is 'DEFRAYED'.
(Other definitions for defrayed that I've seen before include "Put paid to" , "Paid, settled (a cost)" .)