Make Sure Your Personal Injury Settlement is a Binding Contract

If you’re injured in Maryland, there is no doubt that you want an attorney that’s ready to try your case in front of a jury if needed. But the reality is that most cases don’t go to trial–they are settled out of court, through settlement agreements.

In personal injury cases, you may think of settlements as simply a matter of how much the defendant is willing to pay you for injuries you’ve sustained because of their negligence. But in fact, settlement agreements can contain a whole host of other provisions. And if you don’t understand and agree to those terms, you may not have a settlement at all.

Recent Case Discusses Enforceability of Settlements

A recent case involving a homeowners’ association (HOA) and its members is instructive as to how important it is to understand and agree to all terms of a settlement. In the case, the HOA and the members agreed to a “letter of intent,” which contained material terms of a proposed settlement, but wasn’t intended to be the final, binding statement of the terms of the settlement.

Naturally, the HOA then tried to get out of the deal, arguing there was no binding settlement agreement. The trial court agreed, and did not enforce the settlement, as it was only a “letter of intent.”

But the appellate court disagreed, saying that even though not every term was agreed to, and even though the parties had only “agreed to agree,” there was enough there to bind the HOA to the terms. In other words, a valid and binding agreement had been formed, even though not all the terms of the agreement were there.

What are the Material Terms in an Injury Settlement?

In most cases, as long as material terms to an agreement are agreed to, the agreement will be binding on the parties. It would seem that the amount the defendant will pay to an injured victim is the sole material term to a settlement of a personal injury claim.

But often, defendants will try to throw other terms in a settlement agreement. They will request confidentiality–sometimes even restricting you from discussing the settlement from your own family. Or indemnification–a provision that generally makes you responsible for paying them should anybody sue them for matters arising out of the agreement or your outstanding medical bills.

You may agree to an amount that will be paid in a settlement, only to find these kinds of provisions in the actual agreement the defendant proposes be signed. A good plaintiff’s attorney may refuse, saying that the agreement to pay the amount promised is the full and final agreement, and contains all material terms.

Taking this position, however, may leave an attorney to seek court approval of the settlement–in other words, to ask a judge to declare that the parties agreed to all the material terms–payment–and the agreement did not include indemnification, confidentiality, or anything else.

Ultimately, the lesson is that simply agreeing to settle isn’t enough. You need sufficient, material terms to be binding, and you should make sure your agreement doesn’t bind you to provisions you didn’t expect were part of the deal.

If you’re in an accident in Maryland, make sure you have attorneys that protect you by paying attention to the details, all the way to verdict or settlement. Contact the attorneys of Brassel, Alexander & Rice, LLC today for a free consultation to discuss your rights.