News & Noteworthy

Authored - NJ Contract Law Update - Settlement Enforceable Despite Claim That The Agreeing Party Was Misled By Its Counsel
AUGUST 15, 2013 | Windels Marx - Commercial Litigation

In Longo v. First National Mortgage Sources, 2013 WL 1789554 (3d Cir. April 29, 2013), the Third Circuit held that a settlement was enforceable notwithstanding what it indicated might be a triable issue, in separate litigation, based on plaintiffs' claim that their counsel (1) had misled them as to the Court's inclination to dismiss the claim, thus (2) inducing them to settle. The Court did not pass on the truth vel non of that claim, but merely posited that even if that issue were triable, it would be triable only in a claim between the clients and the attorney, and would not be a plenary issue precluding enforcement of the settlement reached in the litigation itself. Because the Court found written evidence that the settlement was actually authorized, it held that any such issue would not preclude enforcement of the settlement, or redound to the detriment of the defendants.

The moral of the story is that if a party is not privy to a disputed event (i.e., directly involved), that dispute may not be material enough to preclude enforcement of a settlement or other contract.

Contact & Legal Disclaimer

Clark Alpert is the author of Guide to New Jersey Contract Law, published by the New Jersey Institute for Continuing Legal Education, originally published in 2007 and updated in November 2011. His updates on New Jersey contract law are based in recent issues and practical methods for addressing similar situations in your practice or business. They are not intended to serve as legal advice. Clark welcomes your questions and comments.

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