Settlement agreements are legal documents used to resolve disputes between parties outside of court. The settlement agreement is a binding contract that outlines the terms of the settlement reached between parties. While settlement agreements are typically considered final, there are situations where the agreement can be set aside.
In this article, we’ll explore the circumstances under which a settlement agreement can be set aside and the legal procedures involved.
Mistake or Misrepresentation
If one party can prove that the settlement agreement was the result of a mistake or misrepresentation, then it may be possible to have the agreement set aside. For example, if one party was unaware of certain facts or circumstances that would have affected their decision to settle, they may be able to argue that their acceptance of the settlement agreement was based on a mistake. Similarly, if one party intentionally misrepresented facts to the other party, this could be grounds for setting aside the settlement agreement.
Duress or Undue Influence
If one party was forced to sign the settlement agreement under duress or undue influence, then the agreement can be set aside. Duress occurs when one party is threatened or coerced into signing the agreement. Undue influence, on the other hand, occurs when one party has an unequal amount of power over the other party, such as when a caretaker convinces an elderly person to sign a settlement agreement.
Fraud
If one party can prove that the settlement agreement was the result of fraud, then the agreement can be set aside. Fraud occurs when one party intentionally deceives the other party for their own gain. For example, if one party concealed information or made false representations to the other party, this could be grounds for setting aside the settlement agreement.
Unconscionability
If the settlement agreement is so one-sided that it shocks the conscience, then it may be considered unconscionable and can be set aside. Unconscionability occurs when one party takes advantage of the other party’s vulnerability or lack of bargaining power to create a lopsided agreement.
Legal Procedure for Setting Aside a Settlement Agreement
If a party wishes to set aside a settlement agreement, they must file a motion in court. They must provide evidence to support their claim and show that they have a valid reason for setting aside the agreement. The court will then consider the evidence and make a decision on whether or not to set aside the agreement.
Conclusion
While settlement agreements are typically considered final, there are circumstances under which they can be set aside. If a party can prove that the agreement was the result of a mistake, misrepresentation, duress, undue influence, fraud, or unconscionability, they may be able to have the agreement set aside. It’s essential to seek legal advice if you believe that a settlement agreement should be set aside, as the process can be complicated, and the burden of proof is on the party seeking to set aside the agreement.