Settlement Agreement Enforced Without All Signatures

Whittington v. Dragon Group LLC, C.A. No. 2291-VCP (Del. Ch. May 1, 2013).  Multiple prior decisions in this case have been highlighted on these pages and they provide more background details for the interested reader.

Issue Addressed:  Whether a settlement agreement needs to be fully executed by all parties in order to be enforceable. Short Answer:  No.

Brief Overview

Multiple prior decisions in this decades-long feud regarding the ownership of a family-owned business are available on these pages at the above referenced link.  The most noteworthy aspect of the latest installment on this final aspect of the parties’ litigation is whether or not a settlement agreement needs to be fully executed by all parties in order to be enforceable.

On page 7 of the opinion, the court refers to the particular perspective that the court applies in connection with a motion to enforce a settlement agreement.  See footnotes 18 through 21.  Most notable is the following statement of contract law:  “Nothing in the law of contracts requires that a contract be signed to be enforceable.”  See footnote 22.

The court explained that in this analysis the key is whether or not the parties specified expressly that the settlement would not be binding unless and until it was reduced to a writing that was formally and fully executed.  Absent such a condition, a fully executed written contract is not required.  See footnotes 22 through 24 and accompanying text.

Also, in awarding fees based on a provision in the agreement that shifted fees to the prevailing party, the opinion references Court of Chancery Rule 88 in connection with an affidavit submitted with an application for fees.