Is There Any Way To Reverse A Settlement Agreement Once Signed?

If you've received your settlement check and—for one reason or another—come to the conclusion it should be bigger than it is, you may be wondering if it's possible to request a do over and have your existing agreement thrown out so you can renegotiate. In general, a settlement agreement becomes final once you sign the contract. However, there are a few times when you can have the contract invalidated.

Legal Grounds for Invalidating a Settlement Agreement

A settlement offer for a personal injury case is just like any other contract. Therefore, it must follow the rules governing how contracts must be laid out. If there are significant errors in the settlement agreement, you may be able to have it invalidated, which would open the door to negotiating a new agreement.

For instance, every settlement agreement must establish what the company is offering, considerations related to the offer (e.g. giving up the right to sue at a later date), and language indicating acceptance of the offer. If any of these elements are missing, you can have the contract thrown out.

Settlement agreements may also be invalidated if:

  • One party committed fraud
  • The party failed to disclose information relevant to the settlement or committed fraud by omitting certain facts
  • You accepted the settlement under duress or undue influence
  • Elements of the settlement are illegal
  • There were material mistakes made by one or both parties

For instance, in 2011, a court invalidate a settlement agreement between two companies because one company make false statements to get the second company to agree to a payment significantly less than what it was due. The second company relied on the misinformation provided by the first company to its detriment (a requirement to prove fraud) and, thus, was able to get the contract thrown out.

Unfortunately, you cannot contest a settlement agreement simply because you are unhappy with the amount the other party offered. Though this may be one of your motivations for revisiting the issue, you can only file suit based on one or more of the previous factors; otherwise, your case will be dismissed by the judge.

A Possible Alternative

One possible way around the inability to invalidate a settlement agreement is to sue for a breach of contract. If the other party is required to do something as part of the settlement agreement and does not adhere to that part of the agreement, you could sue for damages related to that failure. For instance, if an insurance company agrees to replace your motorcycle as part of the settlement agreement and it doesn't, you could go back to court and sue for that breach.

To adequately make a case for breach of contract, you must:

  • Have a valid and properly formed settlement agreement
  • Show the other party clearly breached the terms of the contract
  • Show the breach was a material violation; minor shortcomings or issues do not qualify
  • Prove you suffered damages as a result of the defendant's failure to perform

If you win a breach of contract lawsuit, the court will either award you monetary damages or order the defendant to provide an equitable remedy. An equitable remedy can involve three possibilities:

  • The defendant is ordered to fulfill the agreement
  • The contract is rewritten to resolve the issue (e.g. the company agrees to let you go to a dealership and send it the bill)
  • The contract is cancelled to allow you and the other party to make a new agreement

While these remedies are available to those who come to feel the terms of their settlements were unfair, it's best to negotiate the terms you want before you sign on a dotted line. If you've been in a motorcycle accident, hire a motorcycle accident attorney to represent your interests in any settlement negotiations.


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