It’s one thing to settle a business or legal dispute. It’s another thing to make sure your agreement is properly documented in writing with a settlement agreement. Today, mediator Pam Lester (one of the first women lawyers in pro sports), experienced mediator Erin Gleason Alvarez, and yours truly, will be discussing this important final aspect of negotiating and mediating settlements. You can join us live here, on Clubhouse, at 5 pm ET.
When it comes time for all parties to document and perform under the terms and conditions of an oral settlement, here are a few essential things you can do to protect the oral settlement with a written settlement agreement.
Please note that no legal advice is being given in this post and this disclaimer is incorporate here.
Document the Agreement
Make sure you immediately document your settlement agreement in writing. Use a professionally prepared written settlement agreement.
Parties with Authority
All decision-makers, or people with authority, must be involved in the oral settlement discussions and sign a written settlement agreement. Why? Because (1) you want to avoid someone with authority saying, “I never agreed to that,” and (2) you want to make sure that the necessary people with legal authority sign the written settlement agreement.
For example, depending on the negotiated matter, we may include language like:
“…the undersigned, on behalf of himself/herself, themselves/itself, and all descendants, dependents, heirs, executors, administrators, assigns, representatives, officers, directors, company, and successors agree that…”
Get a properly prepared written settlement agreement signed at the time of the oral agreement. We like to do this before everyone leaves the room or Zoom.
Have a template with you that allows you to fill in the blanks or use a service like DocuSign to obtain a digital signature immediately. The sooner you memorialize in writing your settlement agreement, the less chance a party will have buyer’s remorse.
Make sure the following provisions are covered in the written settlement agreement:
The identity of all parties is correctly described so that all parties know who is being bound by the agreement.
Specifically describe the content, purpose, and time frame regarding precisely what is the subject matter of the settlement.
Comply with all state and federal laws, rules, and regulations.
In California matters, we usually include:
“It is further understood and agreed that all rights under Section 1542 of the Civil Code of California and any similar law of any state or territory of the United States are hereby expressly waived. Said section reads as follows:
“Section 1542. General Release- – Claims Extinguished. A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor.”
Provide for all obligations and contingencies that must or may happen after the settlement is completed (how and when payment is made, agreements regarding future conduct, and performance).
Make sure the agreement is properly signed and dated by all necessary parties who have full authority. We usually also include language similar like:
“This settlement agreement may be executed in duplicate parts. Furthermore, a copy, facsimile, or digital version of this settlement agreement is valid as an original.”