Enforceability of Agreements Made During “Without-Prejudice” Negotiations

Most people are under the impression that nothing is final until both parties sign it, but this belief may not always be accurate. Today, we'll be discussing the enforceability of agreements made during "without prejudice" negotiations.

Most people are under the impression that nothing is final until it is signed by both parties. This assumption may not always be accurate, particularly in the domain of family law. It is important to note that your lawyer has authority to make a binding decision on your behalf without you actually signing an Agreement.

My name is Anna Troitschanski and I am an associate at Feldstein Family Law Group. Thank you for joining me again. Today I wish to talk to you about the enforceability of agreements made during “without prejudice” negotiations.

In family law, lawyers often engage in what we call “without prejudice” negotiations either through correspondences, emails or meetings on behalf of their clients. This means that any discussions held that do not result in settlement, cannot be used against the other party in court as it is done on a without prejudice basis. However, various positions are set out during these settlement discussions and either party may present an offer to the other side. If a clear offer is presented and accepted by the other party, the agreement (even though it is not signed by both parties) may be binding and enforced by the courts.

A lawyer has to be very careful how these positions are presented and needs to ensure that he has clear and direct instructions from his client. In the event that a proposal is not meant to be an offer open to acceptance, the lawyer needs to make that absolutely clear to the other side.

At Feldstein Family Law Group, we ensure that all significant correspondences that go out of our office are first approved by the client. We take the necessary time to explain the nature of the correspondence and ensure that we have clear instructions from our client. I always warn the client that if a proposal resembles an offer and is accepted as is, they will be bound by the terms, and need to ensure that they are comfortable with same. This type of practice mitigates any misunderstanding with the client and ensures that we avoid a situation whereby we bind our clients to an agreement with which they are not comfortable.

Nevertheless, notwithstanding an offer and acceptance, a court still has discretion in a family matter to decline to enforce the agreement. In previous cases a court considered the following matters in determining whether to exercise this discretion with respect to enforcement:

  1. Whether the settlement is unconscionable and improvident;
  2. Has the party been subject to an inequality of bargaining power;
  3. Has a party failed to act in good faith;
  4. Did counsel act without authority;
  5. Are the terms of the agreement sufficiently clear that an attempt to enforce them will not spawn further litigation;
  6. Does the Agreement encompass most if not all of the issues in dispute;
  7. Was the settlement negotiated with the parties physically in each other’s presence;
  8. What period of time has elapsed between the agreement and notification that a party is rescinding;
  9. At what stage in the litigation did the negotiations take place;
  10. Has the other party suffered a disadvantage as a result of the agreement being revoked?

This completes our topic for today. If you have any questions about this topic or any other issues, please contact us at (905) 581-7222 to schedule an initial consultation or visit our website.

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