Can you back out of a settlement agreement? After agreeing to a settlement in your injury case, you may have a change of heart. Perhaps your medical bills have increased unexpectedly or the insurance policies involved are not enough to cover your treatment or recovery.
Courts may strike down settlement agreements that were reached through fraud or misrepresentation, or even when they feel the terms are unfair. But by and large, courts are likely to enforce these agreements.
So can you change your mind after settlement is reached?
Good Faith in Settlements
In many injury cases, a settlement can be reached without ever getting approval from a judge. However, in every settlement agreement (as in all contracts) is the implicit obligation to enter into an agreement with good faith. If you and the opposing party in a suit reach a settlement agreement in good faith, there is likely very little you can do to get out of the deal.
However, if either party (or even your attorney) somehow induced you to agree to the settlement through fraud or misrepresentation, you may be able to void the agreement. Just like other contracts, settlement agreements are voidable if the agreeing party is coerced, defrauded, too young, or somehow lacks capacity to enter into the agreement.
If this is the case, a court will likely hold a hearing to determine if a good-faith agreement was reached. This recently happened in Montana, where a high-school football player attempted to get out of his brain-injury settlement by saying that he never agreed to the settlement. At a hearing in May, a Montana judge believed the teen's attorney was credible in saying there was an agreement, and the boy was forced to take the settlement, reports the Bozeman Daily Chronicle.
What If the Agreement Wasn't Signed?
In most cases, it doesn't matter that a settlement agreement wasn't signed by the person wanting to back out, as long as the other parties can prove there was some form of agreement to the settlement.
Settlement agreements are often completely enforceable as oral contracts. Depending on your state's laws, enforcement of an oral settlement agreement may come down to whether there was a meeting of the minds.
If the court is satisfied there was an agreement -- even outside of court -- then chances are, you won't be able to back out of a settlement. The only way to know whether your settlement agreement is binding is to contact an experienced personal injury attorney. Most are willing to consult about your case for free.
Editor's Note, July 26, 2016: This post was first published in July 2014. It has since been updated.
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