The Law and Your Business

The Law and Your Business- Unsigned Settlement Agreement- Enforceable
Tony Zebouni, Lindell & Zebouni, P.A.

The Furshmans hired a general contractor to perform construction. The general contractor then hired A.C. as a subcontractor. The Furshmans were not satisfied with A.C.’s work and did not pay. In response, A.C. recorded a lien for $16,937.26. A.C. confirmed negotiations with a phone call in which the Furshmans agreed to pay $16,937.26, plus attorneys’ fees. A.C. advised that it “will prepare and record the .lien release” and “prepare a mutual general release.” At the end of this email, it requested: “If this email does not correctly outline our conversation, please immediately contact me by email explaining your understanding of those portions of our conversation discussed in this email.”

The Furshmans did not object or contest the content of the email. Rather, they sent a check for that
amount and wrote: “For Driveway Final Payment.” The next day, they provided the tracking number and wrote “Please send me the proposed lien release, general release, and any other paperwork for my review. After I have time to review, I will let you know if they are agreeable, and if I have any edits, comments, or concerns”.

Upon receipt, A.C. deposited the check. It then emailed the Furshmans a draft proposed settlement
agreement and mutual release and requested them to “provide us any changes that need to be made.” Mr. Furshman responded: “ok, thanks, will have to you tomorrow”. A.C. signed the mutual general release. But the Furshmans never did. Instead, the Furshmans claimed the lien was paid in full and they were no longer obligated to pay attorneys’ fees.

The making of a contract (settlement) depends not on the agreement of two minds in one intention, but on the agreement of two sets of external signs -not on the parties having meant the same thing but on their having said the same thing. There must therefore be an objective manifestation by both parties of assent to the same terms The court found that a valid and enforceable settlement existed between the parties because there was “an objective manifestation by both parties of assent to the same terms. The parties “said the same thing” and agreed to all essential elements — which includes use of a mutual general release. . The Furshmans objectively demonstrated their assent in several ways: not objecting to the settlement confirmation email, sending the check in the negotiated amount, and replying “ok, thanks, will have to you tomorrow” to the email with the proposed release. Randy Furshman’s testimony on his subjective intent and state of mind
does not overcome these objective, external signs.

The Furshmans point to the unsigned mutual general release as proof that no settlement agreement was reached. But the fact that one was not executed or finalized does not prevent formation of a contract or destroy the agreement of the parties (“Even though all the details are not definitely fixed, an agreement may be binding if the parties agree on the essential terms and seriously understand and intend the agreement to be binding on them.”). The release simply memorialized the parties’ agreement.

ADONEL CONCRETE CORP., Appellant, v. RANDY FURSHMAN and SINDEE FURSHMAN