NYLJ “Settlement Agreement Unenforceable if Parties Disagree on Which Claims They Intend to Settler”

By Thomas E.L. Dewey and Christine Kim

Parties engaging in settlement discussions often come to an agreement in principle by exchanging emails and making phone calls. While courts sometimes enforce unsigned settlement agreements reached through such discussions, they will not do so if, after examining the entire context of the settlement negotiations, they determine there was no meeting of the minds.

Lopez de Paz v. Experian Info. Sol., Inc., No. 25-cv-2180 (JGK), 2025 WL 2710310 (S.D.N.Y. Sept. 19, 2025) illustrates that settlement terms are not enforceable if the parties do not agree on the scope of the release. In this case, Judge John Koeltl held that the issue of whether a plaintiff seeks a global release of all claims or the limited release of certain identified claims must be resolved if the parties are to have an enforceable settlement agreement.

If the parties have not finished negotiating this important settlement term, courts are not likely to enforce any unsigned agreement, even when other factors indicate that the parties may have intended to settle without a formal contract.

Additionally, courts do not take a formalistic approach when deciding whether to enforce an unsigned settlement agreement. For instance, performing a minor task such as transmitting a W-9 for the settlement payment does not constitute the type of partial performance that leads to enforcement, and a company’s practice of entering into written agreements to settle certain types of claims does not necessarily shield it from enforcement of an unsigned agreement.

Background

Synida Leann Lopez de Paz (Lopez) sent Experian Information Solutions, Inc. (Experian), a credit reporting service, a letter requesting a reinvestigation into the accuracy and completeness of three accounts (Tradelines) appearing on Lopez’s credit report. Lopez alleged that, rather than conducting a reasonable reinvestigation as required under the Fair Credit Reporting Act (FCRA), Experian responded with a form letter that failed to address the specific concerns she raised.

Lopez sued Experian, and the court instructed the parties to conduct settlement discussions. The parties’ counsel complied and had a phone call to discuss settlement on April 30, 2025. Lopez’s counsel stated on the call that Lopez had concerns with other Tradelines she had not addressed in her complaint and raised the possibility of a global settlement covering all her claims against Experian.

Later that same day, Lopez’s counsel sent Experian a letter indicating that Lopez was willing to settle all claims against Experian for $12,500.

Experian responded by email on May 7, 2025, stating that it was able to “offer $8,000 to settle this matter.” Lopez rejected that offer because it did not include deletion of two Tradelines at issue in the case. Experian’s counsel replied that Experian was willing to delete the two Tradelines if the parties could settle at $8,000.

The next day, on May 8, Lopez’s counsel responded that “the offer as presented is accepted,” but stated that the offer “does not address or include other [T]radelines or the file as a whole”. He added that he expected Experian to try to include in the settlement other Tradelines that were not the subject of this litigation, but that the settlement would not be so broad.

On May 9, Experian insisted that it was under the impression that the parties were discussing a settlement of all claims. Lopez’s counsel claimed that the parties had already come to an agreement, consisting of the deletion of the two Tradelines and a $8,000 payment. He then sent a W-9 to facilitate Experian’s payment to Lopez.

On May 11, Experian wrote to Lopez’s counsel that there was no agreement, and that it had been operating under the assumption that the parties were discussing a global settlement of all claims. Experian maintained that it remained willing to delete the two Tradelines at issue and pay $8,000 to settle all of Lopez’s claims relating to all Tradelines.

Lopez then moved to enforce the purported settlement agreement.

The Court’s Decision

The court (Koeltl, J.) considered whether the unsigned settlement agreement was binding by applying the four factors outlined in Winston v. Mediafare Entm’t Corp.: “(1) whether there has been an express reservation of the right not to be bound in the absence of a writing; (2) whether there has been partial performance of the contract; (3) whether all of the terms of the alleged contract have been agreed upon; and (4) whether the agreement at issue is the type of contract that is usually committed to writing.” 777 F.2d 78, 80 (2d Cir. 1985).

Express Reservation

The court concluded that there was no express or implied textual indication that the parties intended to be bound only by a formal written document, so the first Winston factor weighed against Experian.

Partial Performance

Lopez argued that she partially performed by refraining from further litigation activity such as pursuing discovery or filing motions, and by sending Experian the W-9 form.

The court noted that on May 9, Experian rejected Lopez’s statement that Experian’s settlement offer did not cover all disputed Tradelines. At that point, it was clear the parties disagreed over a material term of the settlement offer and over whether there was a settlement agreement at all.

The court characterized Lopez’s transmission of the W-9 form as a transparent litigation tactic rather than a good-faith partial performance. Actions Lopez took after it became clear that the parties disagreed about the existence of a contract, particularly “trivial” actions like sending a W-9 form, could not constitute evidence that the parties had reached an agreement.

The court further noted that there was no evidence that discovery was paused over the single day that the parties disputed whether they had reached a settlement agreement.

The second Winston factor weighed against Lopez.

Agreement on Material Terms

While noting that no single Winston factor is dispositive, the court placed the most weight on the third factor, which asks whether the parties had agreed on material terms.

Here, the parties never agreed on the key issue of whether Lopez was releasing all her potential and existing claims against Experian or only those involving two Tradelines. The court concluded that the “disagreement over whether the parties had agreed on a general release counsels strongly against finding that the parties agreed on all the material terms.”

The third Winston factor weighed “heavily” against Lopez because the language in the parties’ correspondence indicated that the parties never agreed on “perhaps the most important settlement term.”

Usually Committed to Writing

The court began its analysis of the fourth Winston factor by explaining that whether a settlement agreement is usually in writing depends on the amount of money at issue and the complexity of the agreement, among other factors. Here, the agreement was not especially complex and Experian had offered a relatively small amount of cash to settle straightforward claims.

The court rejected Experian’s argument that this type of agreement requires a written contract because its ordinary practice was to enter into formalized written agreements when settling FCRA claims. Observing that the focus is on the nature of the settlement, not on whether certain entities tend to put settlement agreements in writing, the court held that the fourth Winston factor weighed against Experian.

Holistic Approach

Two of the Winston factors weighed against enforcing the agreement, and two weighed in favor. The court focused on its conclusion that the parties’ minds never met on a material term of the settlement: what claims they thought they were settling.

Noting that the court must consider the totality of the circumstances, paying special attention to the parties’ intent, the court denied Lopez’s motion to enforce the purported settlement agreement because the parties had not agreed on whether the settlement included a general release.

Conclusions

The court’s decision in Lopez de Paz serves as a reminder that, in deciding whether to enforce an unsigned settlement agreement, courts will conduct a holistic analysis of the parties’ intent in the context of the entire case. Of particular importance is whether the parties agreed on the material terms of the settlement.

The universe of claims the parties intend to settle—encompassing all claims or only certain specified claims—is one of the most important terms in a settlement agreement. If the parties do not agree on this term, they do not have an enforceable settlement agreement.

Practitioners should also keep in mind that ministerial tasks – like sending a W-9 form for the settlement payment – does not make it more likely that a court will enforce a purported settlement agreement. Generally, if a party understands that there is a disagreement about whether there is an agreement to settle at all, any actions it later takes are not helpful to show that there was partial performance of the type to make a settlement agreement binding.

Finally, a company or organization’s practice of entering into formal written agreements to settle certain types of claims does not necessarily mean that courts will automatically decline to enforce an unsigned agreement to settle those claims. Instead, courts look to the monetary amount and complexity of the agreement to determine this issue.

This article first appeared in the New York Law Journal on November 10, 2025.

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