, Settlement Agreement Considerations Q&A, Abrahams Kaslow & Cassman LLP | Attorneys at Law

By Julie M. Ryan

There are several procedural avenues through which a dispute between adverse individuals or entities may be resolved. Resolution of a dispute could involve more than one type of method. Depending on a careful analysis of all relevant factors, sometimes an appropriate resolution may be a settlement. An attorney can help provide his or her client valuable advice when it comes to identifying and analyzing settlement options. The client will always control which option is selected, if any. Here are some more things to consider regarding settlements:

1. If opposing parties choose to begin settlement negotiations with each other, are they required to ultimately agree to settle their dispute?
No. Nebraska law appreciates the potential benefits of settlements. As to some disputes filed under a lawsuit, the court may encourage or require the parties to at least try to settle the dispute before a trial takes place. But a court cannot force parties to settle. Mere participation in settlement negotiations, whether connected to a lawsuit or not, generally does not mean the parties must be stuck negotiating until a settlement can be reached. If negotiations reveal an amicable settlement is simply not going to happen, a different dispute resolution method should be used to seek the desired relief.

2. If the parties agree to some – but not all – terms for a settlement, can one party later back out of the settlement altogether?
It depends. Nebraska law indicates that if the parties have already agreed on how to settle the most important issues of their dispute, then one party may be able to stop another from later trying to back out of a settlement agreement solely due to the addition to the agreement of compatible or standard terms. If the added language changes the original more-important terms, then the settlement may be unenforceable. Other reasons for unenforceability include if it was obtained by fraud, error, or mistake.

3. Is a settlement agreement a type of contract?
Yes. Like any other contract, an enforceable settlement agreement is formed by (1) a concrete offer from one party to another, (2) unconditional acceptance to that offer by the receiving party, and (3) consideration.

4. Do settlement agreements have to be reduced to writing or can they be made by verbal communication only and still be enforceable?
It depends. Nebraska law generally recognizes oral contracts if supported by evidence. However, (1) the subject or nature of an agreement may require a settlement be in writing and be signed by the party against whom it will be enforced, and (2) some local courts have rules that may require a settlement agreement be in writing and be signed. If so, and the verbal settlement was not stated on the record in court, then the settlement is usually not enforceable in Nebraska. A written contract signed by each party is best practice. An attorney can help ensure a settlement agreement includes not only the important agreed-upon terms, but also language that protects the interests of his or her client.

Depending on the situation, a settlement could be beneficial to resolve a dispute. A written settlement agreement can describe why the parties wanted to settle and clearly state what each party must do and cannot do. As a result, the parties may resolve their dispute without the risk or expense of litigation. Also, the written agreement may prevent future litigation.

For more information, please contact AKC Law at 402.392.1250 to speak with Julie or another attorney on our litigation team.