If you (or you and your attorney) enter into a settlement agreement with a defendant and/or a insurance company, these “agreements” are often considered binding contracts and cannot be appealed. In fact, once settlement agreements are signed, they are a done deal, regardless of how you feel afterwards…
Exceptions to the Rule
However, in some cases, a settlement agreement can be invalidated under the following circumstances:
- If one party committed fraud in reaching the agreement
- If one party was under duress or undue influence when entering into the agreement
- If the terms of the agreement are illegal
- If one or both parties make a mistake when entering into the agreement
If you wish to have your settlement agreement invalidated because you are not happy with the terms, you will have to prove one of the above exceptions in court by bringing a new lawsuit.
Therefore, it is critical that you consult with a reputable personal injury attorney as soon as you realize that something may be wrong with your settlement.
If you are claiming fraud, then you must show the following:
- An untrue representation of fact was knowingly (deliberately) made by the defendant;
- The defendant made such representation recklessly;
- And that the defendant’s untrue representation was made to deceive you and that it induced you to enter into the settlement agreement.
One example of fraud includes omitting critical facts (like the defendant recently won the lottery but failed to disclose that fact). Another example of fraud includes intentionally stating a false fact (such as the amount of insurance coverage available). Fraud is a legal term that has a specific legal definition. Therefore, if you think the other party committed fraud, contact an attorney as soon as possible!
In order to show that you were under duress or coerced when you entered into a personal injury settlement agreement, you will need to show (by clear and convincing evidence) that the other party deprived you of the exercise of your free will.
An example of duress/undue influence is when one party threatens the safety of the other party. Another example includes one party taking advantage of the mental state of the other party.
Again, duress and undue influence are legal terms and you should consult with an attorney if you believe that you were under duress when entering into your personal injury settlement agreement.
You may be able to invalidate your personal injury settlement agreement if you can show that the agreement was reached based on an illegal act, or if one of the terms of the agreement is illegal.
An example of this is if the terms of the agreement require the other party to do something illegal, such as falsely reporting the agreement to the court.
Also, if one of the insurance company’s actions was illegal, and that illegality resulted in the reaching of the settlement agreement, then the contract may be invalidated.
You may also be able to invalidate your personal injury settlement if you can show that a mistake was made. You cannot invalidate the settlement if you did not understand a term or if you are unhappy with the agreement. However, you may be able to invalidate the agreement if you can show that it is based upon your “unconscious ignorance.”
A mistake must be material (meaning major) in order to invalidate a settlement agreement. An example of mistake in the case of a settlement agreement is if a forged document was relied upon when entering into the settlement but neither party knew the contract was forged. Contact an attorney!
Trying to invalidate your personal injury settlement is a complicated process and will likely require you to file a lawsuit. There are certain time limits in doing so and the ways you can invalidate your agreement are very limited and very specific. Therefore, it is highly recommended that you contact an attorney to aid you in this process as soon as possible.
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