If you are trying to resolve your commercial litigation action through settlement, and you and the other side agree to a settlement, you may have various tools to force the other side to honor the terms of that deal. One is to ask the court to issue an order to enforce the settlement agreement. When you ask the court to issue such an order, it is very important to have ample evidence to establish that you and the other side had an enforceable agreement. You need some sort of persuasive proof that establishes that there was a clear set of terms and that there was mutual assent to those terms. To help you accumulate and present the evidence you need in your case, be sure you have experienced South Florida commercial litigation counsel representing you.
As an example of the sort of proof that is sufficient, and what is insufficient, a recent case from here in South Florida is illustrative. A Florida real estate deal that failed was the basis for litigation. A Palm Beach County optometry office sued a real estate entity over the failed deal. The parties litigated for a period of years, then began to negotiate a settlement.
Disagreement erupted anew after the sides disputed whether or not they’d actually consummated a binding settlement agreement. The defendants, believing that they had a binding settlement in place, asked the judge to issue an order to enforce the agreement. In support of their motion, the defendants brought to the judge emails between their lawyers and the plaintiffs’ lawyers, as well as a deposition given by the representative of the defendants’ insurer.
The defendants won in the trial court, but the plaintiffs appealed and won. The reason the agreement was not entitled to court-ordered enforcement came down to a basic concept of contracts. Agreements settling litigation are analyzed in the same way that most any other contracts are. That means that, in order to be enforceable, there must be proof of “manifestation of mutual assent.”
In this case, the evidence failed to show that required level of mutual approval. The defendants offered to settle the case for $275,000. The plaintiffs’ counsel indicated approval, but based that acceptance on a condition – the approval by a third party who would be sharing the payout. While that was pending, the defendants began expressing concerns about the language in the settlement and the releases.
Revisions were made, exchanged and accepted by both sides, but again, final consummation was conditioned on approval by third parties. In this case, it was the defendants’ insurer’s approval that held up final completion. While that was still ongoing, the plaintiffs’ counsel withdrew consent to the settlement.
That evidence, according to the appeals court, constituted proof that the two sides engaged only in preliminary negotiations. Preliminary negotiations are not enforceable. There could not have been a binding settlement because the defendants conditioned final approval on a “sign off” from the insurer, which never came prior to the plaintiffs’ counsel withdrawing from the proposed agreement. When one side conditions final acceptance on a condition, and the other side rejects the agreement before that condition is fulfilled, then there is no mutual assent and no deal.
Whether you are negotiating a contract, negotiating a settlement or engaging in litigation, you need knowledgeable counsel working hard for you. The diligent South Florida commercial litigation attorneys at Stok Kon + Braverman have been effectively representing our business clients and protecting their interests for many years.
Contact us online or by calling (954) 237-1777 to schedule your consultation and find out how this firm can help you.
More blog posts:
The Consequences of Rejecting a Settlement Offer in Your Florida Commercial Litigation Case, Florida Business Lawyers Blog, March 23, 2018
Ambiguity in Settlement Offer Defeats Florida Commercial Tenant’s Claim for Attorneys’ Fees in Lease Breach Case, Florida Business Lawyers Blog, Feb. 14, 2017