Making the Settlement Stick: Best practices for memorializing agreements

Settlement agreements are contracts. They are favored in the law and are governed by general principles of contract law. A contract requires offer, acceptance, and consideration. Acceptance is an expression by word, sign, or writing of the intent to be bound by the terms of the offer. Once an offer is accepted there is a valid contract and all that remains is performance of the agreed upon terms.

In general, contracts can be oral and not written. However, certain contracts must be in writing (for example a contract for the sale of goods for $500 or more, or a contract for the purchase or sale of real estate). And overall, it’s best to have settlement agreements memorialized in writing to make sure all parties are clear about the terms of the agreement and to make it easier to enforce the agreement in case one party doesn’t follow through with the terms as promised. Informal writings are sufficient to establish a contract, even if the parties contemplate signing a more formal written agreement, so long as the subject matter is agreed upon, the terms are stated, and the parties intended a binding agreement prior to signing the formal written agreement.

If there is a court case or legal proceeding, certain agreements must be in writing. Stipulations between parties in civil matters in county superior court or courts of limited jurisdiction like county district court – including settlement agreements – must be signed (so written and signed) or put on the record (so in open court and recorded there). Civil Rule (CR) 2A; Civil Rules for Courts of Limited Jurisdiction (CRLJ) 2A. And stipulations by an attorney to bind their client in the proceedings of any action must be signed by the client/party or by their attorney or put on the record. RCW 2.44.010. Also, if the underlying matter is a personal injury claim (for injury or death to person or harm to property), and there are multiple potential tortfeasors or defendants, those defendants may need any settlement agreements in writing, regardless of whether a lawsuit has been filed yet, in order to sort out contribution between them. RCW 4.22.060.

So, if you are reaching some settlement in a dispute before any lawsuit is filed, you likely do not need to get that agreement in writing. But the best practice is to get that settlement agreement written down and signed – consider seeking the help of an attorney – or at the very least to exchange emails confirming everyone agrees to all the same terms.