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NYLJ “‘Final Version’ of Settlement Agreement Not Enforceable When Client Withholds Signature”

By Thomas E.L. Dewey

A party can withhold his signature and remain unbound by a settlement agreement, even when his attorney had actual authority to approve material terms of the settlement and approved a “final version” of the settlement draft. That was the court’s conclusion in a recent case in the Southern District of New York.

In Fernandez v. HR Parking, 16-cv-2762, the court denied a motion to enforce a written settlement agreement that attorneys on both sides had approved, after two of the five plaintiffs refused to sign. Using the four-factor test from Winston v. Mediafare Ent., 777 F.2d 78, 80 (2d Cir. 1985), the court concluded that the parties had communicated an intent not to be bound until a written agreement had been

fully executed.

This article first appeared in the New York Law Journal on February 10, 2022. L. Lars Hulsebus , an associate of the firm, assisted in the preparation of the article.


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