Under Florida law and as a matter of public policy, settlements are highly favored and will be enforced whenever possible. Settlement agreements are governed by the rules of contracts, and the existence of an enforceable contract is contingent upon the Parties’ agreement to the essential terms of the agreement. What happens when you think you have a settlement agreement, but the other party refuses to sign a formal written settlement agreement?
Is a formal written agreement required to enforce a settlement in Florida?
Creating an enforceable settlement requires agreement to the essential terms of an agreement. What constitutes a material or essential term varies from case to case. Nevertheless, once the parties reach an agreement on the essential terms, a formal written agreement is not required to enforce a settlement. Numerous courts in Florida, both state and federal, have enforced agreements reached through a series of emails between attorneys.
For example, in Warrior Creek Development, Inc. v. Cummings, 56 So. 3d 915 (Fla. 2d DCA 2011) the attorneys involved negotiated a settlement over e-mail. Their emails set forth the “essential and material terms” of the agreement between the parties. The attorneys subsequently drafted a written settlement agreement, which one party refused to sign, stating “the deal is off”. The Second District Court of Appeals affirmed the trial court’s order enforcing the settlement, finding that the “parties had agreed upon all of the essential and material terms for settlement and that those terms were reflected in the November e-mail. Similarly, in Miles v. Northwestern Mut. Life Ins. Co., 677 F. Supp. 2d 1312, 1315-1317 (M.D. Fla. 2009) the Court held that a written settlement agreement is a mere formality where the parties act with the intent to follow the settlement, and the written agreement is essentially what was already agreed upon.
Negotiating a settlement over email – the considerations
These cases illustrate the risks inherent in negotiating a settlement over email. A party who wants to avoid being bound in the absence of a written settlement agreement should consider making an offer conditional upon the execution of a mutually agreeable settlement agreement and release. Conversely, setting out the essential terms of an agreement in written communication can result in a settlement that is enforceable against a party who gets cold feet.
COVID-19 closes Florida courts – Is it time for a settlement agreement?
As COVID-19 closes courts across Florida and the entire Unites States, litigants may be more interested in settling a dispute for a couple of reasons. First, litigation is a lengthy process with an average dispute taking 1-3 years if there is no settlement. Now, with COVID-19, timelines have been extended significantly and will prolong the litigation process further with indefinitely postponed trials.
This pandemic has also caused many to feel uncertain when it comes to their financial status and job security. Litigation is expensive, time-consuming, and stressful. By settling, you can avoid costly attorneys’ fees and most likely will receive financial compensation sooner than you would by going to court.