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Enforcement or Cancellation of a Settlement Agreement

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What is a Settlement Agreement?

In a personal injury setting, many cases are resolved through a settlement that may occur before trial or during the middle of trial.  A settlement can often save the parties much time and resources that would have been spent on litigation costs.  When settling, the parties will create an agreement that lists the various terms of the settlement.

A basic settlement agreement will cover:

  • Which parties may be held liable, and to what degree
  • Which parties will be compensated for injuries or losses
  • How much the injured party will receive in payments
  • How the payments will be rendered (lump sum, monthly payments, etc.)
  • Whether the liable party needs to take any further actions (such as correcting dangerous conditions or repairing broken facilities)
  • Repayment of other costs such as attorney’s fees and court filing costs

Settlement agreements can also contain various other provisions according to the needs of the parties.  The settlement agreement may be submitted to the judge for approval, and it will become part of the court record.

How are Settlement Agreements Enforced?

Settlement agreements can be enforced by a judge if they aren’t being followed.  For example, if the defendant had agreed to pay for the injured party’s medical expenses, they are required to do so in a reasonable time or according to the terms written in the settlement agreement.  If they fail to do so, a judge can enter a judgement against the defendant and order them to pay the unpaid amounts.

Because settlement agreements are typically made outside of court, enforcement can sometimes be limited.  For example, violations of a child support order can result in a contempt order or even incarceration. However, with a settlement agreement, such strict measures might not be imposed immediately; instead, a contempt order may only result after repeated failure to obey the terms of a settlement agreement. 

Can a Settlement Agreement be Cancelled?

In some cases a settlement agreement may be cancelled or terminated under law.  For example, if it is discovered that the agreement was reached only on account of misrepresentation or fraud by one of the parties, the agreement might be terminated.  A common example of this is where the injured party has failed to disclose certain assets or income in order to obtain a higher settlement award.  Or, the liable party may have materially misrepresented their financial condition in order to pay less. 

Under such conditions, a settlement can be cancelled, even if many years have already gone by.  In order to avoid having a settlement agreement subject to cancellation, the agreement needs to be entered into freely and voluntarily, and after a full disclosure of all the relevant facts.

Do I Need a Lawyer for Assistance with a Settlement Agreement?

Settlement agreements can often help both parties avoid the difficulties associated with a full length-trial.  However, it is generally necessary to work with a lawyer when dealing with a settlement agreement.  If you need assistance with enforcing, canceling, or terminating a settlement agreement, an experienced personal injury lawyer in your area can provide much help.  Your attorney will be able to determine the grounds for enforcement or cancellation, and can represent you in court during judgment hearings. 

Photo of page author Ken LaMance

, LegalMatch Law Library Managing Editor and Attorney at Law

Last Modified: 04-30-2012 12:09 PM PDT

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