- In many (most cases/lawsuits) the parties settle their dispute.
- There is strong public policy favoring settlement of litigation.
- Once a case is settled, New Jersey Courts will enforce the terms of a settlement wherever possible.
- The legal standard for vacating a settlement is not easily met in New Jersey so beware before you settle.
New Jersey’s Law on Settlement
It is a well-settled principle in NJ that a settlement agreement between parties is a contract governed by basic contract principles and “absent a demonstration of “fraud or other compelling circumstances,” a court will enforce a settlement agreement as it would any other contract.
Among the contract principles applicable to settlement agreements “are that courts should enforce the intentions of the parties” and not “rewrite or revise a settlement agreement when the intent of the parties is clear.” Thus, when the intent of the parties is plain and the language is clear and unambiguous, a court must enforce the agreement as written, unless doing so would lead to an absurd result. To the extent that there is any ambiguity in the expression of the terms of a settlement agreement, a hearing may be necessary to determine the intent of the parties at the time the agreement was entered and to implement that intent.
If a Settlement is Unclear, then it Must Be Ambiguous. If Ambiguous it, May Be Vacated.
A contract is ambiguous if its terms are “susceptible to at least two reasonable alternative interpretations.” When a contract is ambiguous in a material respect, the parties must be given the opportunity to illuminate the contract’s meaning through the submission of extrinsic evidence. While extrinsic evidence should never be permitted to modify or curtail the terms of an agreement, a court may “consider all of the relevant evidence that will assist in determining the intent and meaning of the contract” in attempting to resolve ambiguities in the document.
So there you have it. Remember, the Courts in New Jersey will bend over to enforce a settlement.
To discuss your NJ business litigation matter, please contact Fredrick P. Niemann, Esq. toll-free at (855) 376-5291 or email him at firstname.lastname@example.org. Please ask us about our video conferencing consultations if you are unable to come to our office.
By Fredrick P. Niemann, Esq. of Hanlon Niemann & Wright, a Freehold Township, Monmouth County, NJ Business Litigation Law Attorney