The former owners of the Washington Federals U.S. Football League team have agreed to pay the District government $205,000 in an out-of-court settlement of the city's claim that moving the team to Orlando, Fla., is a breach of contract that could cause loss of anticipated revenue to the District.

The city filed a $2.5 million suit in June against Washington Football Partners Ltd., Capital Sports Management and Washington attorney Berl Bernhard, majority owner of the Federals. The suit claimed that the franchise owners had a lease with the city that committed the team to RFK Stadium through 1990.

Bernhard said yesterday the settlement is "reasonable," but it is not an indication that the former owners believe they had breached their contract when they sold the team to a group in Orlando.

"I think we were right," but settling out of court was preferable to the legal fees and delays in the sale of the team that could have resulted from going to court, Bernhard said.

City officials agreed to the settlement after it became clear that the Federals could not have played in Washington after the 1985 season anyway because of a decision by the USFL to change the season from spring to fall, according to a statement. The Washington Redskins of the National Football League use RFK Stadium during the fall.

The settlement "establishes the principle that those who contract with the District cannot simply walk away from their commitment to the District without some consequence," Mayor Marion Barry said in a statement.

The city will be "firm but not vindictive when business ventures are not as profitable as originally anticipated," he said.