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So, it many times goes like this: Litigating is either threatened and immediately settled or litigation is protracted, and the parties agree upon a dollar number for settlement of the dispute.  They apparently agree.  And then a form of settlement agreement or release is circulated, and one party or the other says: “Wooah, I didn’t agree to those terms.  I just agreed to a release of my claims for the money.”

The touchstone is: A settlement is a settlement.  And, yes parties and attorneys can be unreasonable and rapacious, using the last details to queer what folks previously thought was a settlement of a dispute, or to leverage even more money for their client.

If you orally or via email, in person or thorough your attorney, agree to settle a claim in exchange for money, that agreement to settle in itself can be enforceable.  Moreover, the party objecting to the additional language arguably can go into Court and ask the Judge to enforce that specific settlement, not another settlement with “proforma” or “typical” other provisions.

Don’t reasonable” and “customary” terms apply in filling in the “other terms” of the settlement?  Well, yes, no and maybe.

The key question is a meeting of the minds on all material terms of the settlement.  By not addressing these “other” issues at the time of the initial settlement discussions, you may leave those details to the discretion of the Court.  (And note that the Court can assess attorney fees against the defaulting party [the party not complying with the claimed settlement].  This can get expensive.)

Many of our clients are used to negotiations relating to real estate, and, yes, the law generally requires those agreements to be in writing and signed to be enforceable.  But most settlement agreements do not need to be in writing or signed to be enforceable.  All that is needed is a meeting of the minds of the parties to the agreement with all material terms being addressed and agreed.  Indeed, settlement of litigation (or perhaps even a non-litigation dispute) relating to real estate likely can be effectuated in an oral settlement agreement.

Soooo…

As one engages in settlement discussions, one must carefully consider the other material terms one wants to be addressed in the settlement at the time of those discussions.  Here is a partial checklist to consider:

• What claims are we in fact settling?
  • Only the claims in the demand letter or present litigation, or
  • All claims from the Plaintiff?
  • Is the defendant waiving all of his claims as well?
  • What about claims unknown at the time of the settlement?
• Assignment of rights intellectual property (software, logos and other art, plans and drawings).
• Confidentiality.
• No posting on social media.
• No release to the media or other public statements.
• Non-disparagement.
• Court costs.

In addition to these sort of “dangling” details, the underlying litigation could address substantive issues such as title to real property, ownership of a business, theft of trust funds, and so on.  This short checklist is just the sort of thing litigants (and their attorneys) may not initially think to address in settlement negotiations.

Because of this “hair trigger” impact of an oral agreement, this firm frequently recommends the use of a “We Can Talk” Agreement requiring, among other things, that an agreement be in writing and signed in order to be enforceable.  Such an agreement precedent to settlement talks should be enforceable to prevent premature settlement arising from informal conversations.

Finney Law Firm professionals are here to help you resolve your personal and business disputes, including properly negotiating and documenting a settlement agreement.