QUESTION

Do I have to accept an oral settlement offer that I agreed to dollar amount but I was unaware of additional terms?

Asked on Oct 06th, 2014 on Contracts - Minnesota
More details to this question:
I have been involved in a contract case for over 3 years. We had a biforcated trial where terms of the contract were in phase 1 and damages were in phase 2. We completed phase 1 and were about ready to go to trial in phase 2. My lawyer called me right before I was going into a doctor's appointment and said there was a settlement offer. Only dollar amounts were discussed. The amount was unacceptable. I had a lunch meeting directly after the doctor appt. with the attorney. We were able to come to an agreement on dollar amount with the other party via phone calls during the meeting. The next day I was looking at my email and there was an email form my attorney that was sent prior to the meeting where we agreed to a settlement. It contained the original settlement amount and additional terms. I agree with the dollar amount decided at our meeting but not the additional terms that I was not aware of and never discussed. Am I bound by the settlement offer with the additional terms
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1 ANSWER

Appellate Practice Attorney serving New York, NY
That depends.  If you, or your lawyer, agreed subject to execution of a formal written agreement (which is often the case with settlement agreements), then you have no contract.  For example, if you said "I agree, write it up.", you may have a contract; if you said "I agree, we'll work out the details in the paperwork" you probably don't have a contract.  Also, in some jurisdictions (I don't know about Minnesota), a settlement agreement may have to be in writing, or agreed to in open court, to be binding, and there may be additional formalities required. Assuming that there is no need for a signed writing for a valid settlement agreement in Minnesota, the question is whether you are bound by the additional terms.  Unfortunately, I don't think the answer is black and white.  Normally, there is no contract unless both sides have agreed on all material terms (I'm assuming that the terms to which you object are material).  Here, although you may not have agreed to all material terms, you may be bound by your lawyer's agreement, as he is your agent.  Did your lawyer know that you had not seen his email with the additional terms?  If he thought that you had seen that email and had agreed to the other terms, and he communicated acceptance to the other side, you may be bound by it.  EVen if he knew you had not seen the additional terms, but accepted on your behalf anyway, you could be bound by it (although you could sue the lawyer.)  Alternatively, the agreement might be considered void for mutual mistake; you thought you were agreeing to one thing while the other side thought you were agreeing to something else. I'm sorry I can't give you a short final answer.  If a settlement agreement has to be written and signed to be valid, you're ok.  If not, there are questions.
Answered on Oct 07th, 2014 at 2:39 PM

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