BEWARE OF THE ORAL AGREEMENT.....UNLESS YOU REALLY MEAN IT

Recently, we were reminded of the danger of making an oral agreement. When a party makes a settlement offer that is accepted, even orally, it can create an enforceable contract. Being careful what you agree to sounds obvious, but there are actually legal reasons why it matters what you say around your spouse in the context of a divorce.

We have an appellate case that basically says that the court can enforce an oral agreement that is reached by the parties. Additional cases have reinforced this principle and added that the actual offer, without regard to prior settlement discussions, is what really matters. What does it all mean?

Mediation is the only time during a divorce when making an offer is safe, without having to worry about the court being called upon to enforce an agreement. Mediation is completely protected under our law, meaning that everything discussed at mediation is off limits. The mediator can never be called to testify and you cannot discuss what the parties said at mediation. Other than at mediation, your words can be used against you.

If you are sitting in the courthouse and make an offer, you have to be prepared for that offer to be accepted. If you offer $100 per week in alimony and your spouse says, “I accept,” you may have a binding agreement. Does this mean that you should never make an oral settlement offer? The answer is that it depends on how comfortable you are with that approach.

The better solution is to always make your settlement offer in writing. You should ensure that all issues are addressed in your proposal, because you could be left with an offer and acceptance on one point without an agreement on the balance of the issues that are important to you. Sometimes, particularly when you are at the courthouse, you and your attorney may try to achieve a settlement and field multiple oral settlement offers. There is nothing wrong with proceeding in that fashion, but make sure that the offer is exactly what you are offering, complete with all caveats.

If you have any questions about oral agreements, contact us at 732-529-6937 and schedule a consultation. We are not going to tell you what you want to here; we are going to tell you what you need to know.

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