Here's your riddle of the day: When is an unsigned settlement agreement really a final settlement agreement?
Answer: When a judge is persuaded that all the material terms of the deal are written down.
A November 1, 2013 decision of the Maryland Court of Special Appeals affirmed a longstanding belief in the legal community that the absence of a final document is not fatal to a deal.
This case caught my attention because is had elements that are common to our real estate litigation practice- two adjoining land owners disagreed over ownership of several dozen parking spaces used by their tenants. One sued the other, and the parties began to negotiate a settlement while the court case was squeezing through the circuit court. As is common in these cases, the court deadlines were pushed back, by agreement, to accommodate the continuing settlement negotiations.
The two sides exchanged written documents, starting with a "letter of intent" that outlined the key terms of the deal, with the promise that both sides would sign a "final document" containing all terms. But as is also common, one side backed out of negotiations.
The reasonable folks pressed to conclude the deal, and were forced to sue in the circuit court to enforce what was perceived to be a settlement of the original dispute.
What a mess!
The circuit court ruled in favor of the agreement, and the appellate court affirmed that decision. The parties had a final deal, even though all the details had not been fully discussed, and even though a final document was not executed.
Can you be forced into a settlement? Not really. What you should take from this decision is that an agreement exists when all the MATERIAL terms are established. Think of a sale of a box (full of desirable goodies and widgets). If you and the seller agree on the contents of the box, the price of the box, and the date of sale, then you likely have a deal. Later disagreement on the color of the box, whether it arrives by wagon, truck or boat, are not necessarily material to the deal and will not bar enforcement by one side or the other.
Think you have a deal? Tell us all about it.
Answer: When a judge is persuaded that all the material terms of the deal are written down.
A November 1, 2013 decision of the Maryland Court of Special Appeals affirmed a longstanding belief in the legal community that the absence of a final document is not fatal to a deal.
Post by Young & Valkenet.
This case caught my attention because is had elements that are common to our real estate litigation practice- two adjoining land owners disagreed over ownership of several dozen parking spaces used by their tenants. One sued the other, and the parties began to negotiate a settlement while the court case was squeezing through the circuit court. As is common in these cases, the court deadlines were pushed back, by agreement, to accommodate the continuing settlement negotiations.
The two sides exchanged written documents, starting with a "letter of intent" that outlined the key terms of the deal, with the promise that both sides would sign a "final document" containing all terms. But as is also common, one side backed out of negotiations.
The reasonable folks pressed to conclude the deal, and were forced to sue in the circuit court to enforce what was perceived to be a settlement of the original dispute.
What a mess!
The circuit court ruled in favor of the agreement, and the appellate court affirmed that decision. The parties had a final deal, even though all the details had not been fully discussed, and even though a final document was not executed.
Can you be forced into a settlement? Not really. What you should take from this decision is that an agreement exists when all the MATERIAL terms are established. Think of a sale of a box (full of desirable goodies and widgets). If you and the seller agree on the contents of the box, the price of the box, and the date of sale, then you likely have a deal. Later disagreement on the color of the box, whether it arrives by wagon, truck or boat, are not necessarily material to the deal and will not bar enforcement by one side or the other.
Think you have a deal? Tell us all about it.
