We investigate the distribution of strain and deformation in the host sediment that arises once a contraction‐driven shear fault has localized and propagated under a zero-lateral strain condition. Numerical modeling of displacement distributions compares well with those measured using 3D seismic data. The parameters that determine the displacement field for a single normal fault embedded in sediments are fault height, overburden effective stress, stiffness, and residual friction angle (or post-peak strength). Proximity to the free boundary biases the displacement pattern, which becomes asymmetric. Although the measured displacements and numerical predictions are similar, the measured magnitude requires pronounced low stiffness of the sediment as well as low post peak shear strength. This requirement suggests that sediments hosting contraction-driven shear faults most likely have high porosity and high clay fraction and have undergone diagenetic reactions involving significant mineral dissolution. The diagenetic evolution of the sediment and its current composition may explain the global scaling relationship between the measured displacement and fault height for polygonal fault systems.