Settlement Agreements "in Principle" Are Not Enforceable Settlement Agreements

Negotiating a settlement can be a tricky business, with drafts going back and forth and language tweaking continually occurring. All of that document tweaking means that there's plenty of opportunity for the whole thing to fall apart, as a recent case out of Connecticut, AREH Windsor Locks, LLC v. Tops Markets, LLC, Docket Number HDSP172841 (behind paywall), reminds us. 

In the case, the parties had reached a settlement agreement "in principle," in the words used in an e-mail by one of the defendants' attorneys. The "in principle" language underlined the fact that, in fact, no true meeting of the minds had ever actually occurred. Defendants' attorneys' e-mails had warned of additional changes that would be made to the settlement agreement draft--even if those e-mails did characterize those changes as "a few" and "very minor." The last e-mail sent by defendants' attorneys before the agreement fell apart referred to the draft as "final" but explicitly noted that it was subject to the plaintiff's approval and that it needed the plaintiff's "green light." 

The court concluded that the defendants never received the requested "green light." So, although the defendants' attorneys seemed to view the agreement as "final," there had in fact never been a final agreement between the party. The defendants, it turns out, may have been counting the settlement chickens before they hatched.