By Leslie King O’Neal
Are Oral Agreements “Not Worth the Paper They’re Printed On?”
Movie producer Samuel Goldwyn famously quipped, “A verbal contract isn’t worth the paper it’s written on.” But is this always true? While some types of agreements, such as real estate contracts,[i] must be in writing to be enforceable under the Statute of Frauds, courts uphold other oral agreements in certain circumstances. This can include settlement agreements. Also, since email correspondence is ubiquitous, some courts have found email exchanges to be binding settlement agreements.
First Circuit Upholds Oral Settlement Agreement
Earlier this year the First Circuit Court of Appeals upheld an oral settlement agreement and granted defendant’s motion to enforce the settlement. The First Circuit affirmed the trial court’s order dismissing plaintiff’s case with prejudice where plaintiff refused to sign a written settlement agreement and release. In Maccarone v. Siemens Industry, Inc.[ii] plaintiff sued her employer for alleged violations of the Fair Labor Standards Act and the Rhode Island wage and hour laws.
Oral Settlement Captured in Recording
The parties and counsel participated in a court-annexed settlement conference before a magistrate judge. The plaintiff appeared via Zoom.[iii] The parties reached an oral settlement agreement, and the magistrate judge recited the essential settlement terms on the record, as captured by the conference’s recording. Both parties’ counsel agreed to the terms. The trial court placed the recording in the docket under seal and provided copies to counsel.
Plaintiff Refuses to Sign Written Settlement Agreement
After the conference Siemens prepared a written settlement agreement and release. Plaintiff refused to sign, informing her counsel she had “concerns about the settlement.” Plaintiff’s counsel sent an email to opposing counsel and to the magistrate judge stating that Plaintiff felt she was pressured into the settlement and she wanted to talk with the district court judge.
Defendant Moves to Enforce Oral Settlement Agreement
Siemens moved to enforce the oral settlement agreement. Plaintiff opposed the motion and requested an evidentiary hearing, asserting the settlement agreement was not enforceable because she was subject to undue influence, she did not agree to several material terms and the agreement was not placed on the record because there was no stenographer and the parties were not sworn. The district court granted the motion to enforce the settlement, finding no factual basis for Plaintiff’s undue influence claims. Ultimately, the district court ordered Plaintiff to sign the settlement agreement,[iv] stating that if she refused, the court would entertain a motion to dismiss. Plaintiff refused to sign the agreement, so defendant moved to dismiss the case with prejudice. The trial court granted this motion. Plaintiff appealed.
First Circuit Holds Oral Settlement Agreement Enforceable
Noting that, “[O]ral settlement agreements are enforceable as long as the parties have mutually assented to all of their material terms,”[v] and that a party’s refusal to sign a written agreement memorializing the terms of an oral settlement does not prevent the court from enforcing the agreement,[vi] the First Circuit upheld the trial court’s orders. The appellate court emphasized that neither Plaintiff nor her counsel objected to any of the terms when the magistrate judge stated them on the record during the conference. Rather, Plaintiff’s counsel expressly confirmed her agreement to the terms stated.
Are Oral Settlement Agreements Enforceable in Other Jurisdictions?
Outside the First Circuit, specific statutes, case law or court rules affect enforceability of oral settlement agreements. Some states, such as Florida and New York, have specific rules or statutes regarding settlement agreements.
Rule 1.370(b), Fla. R. Civ. Proc.– Mediation Settlement Agreements Must Be Written and Signed by Parties
Florida Rule of Civil Procedure 1.730(b)[vii] requires full or partial settlement agreements reached during mediation to be reduced to writing and signed by the parties or their representatives. The rule permits original or electronic signatures and allows agreements to be signed in counterparts.
Common Law Contract Principles Don’t Require Parties’ Signatures
In Parkland Condominium Association v. Henderson[viii] Florida’s Second District Court of Appeal held that Fla. R. Civ. P. 1.730(b) rendered unenforceable a mediation-related settlement agreement evidenced only by email exchanges between the parties’ counsel. While noting that parties’ signatures are not required under common law principles of contract formation (which govern settlement agreements),[ix] the appellate court found “a supposed settlement agreement resulting from mediation cannot be enforced absent the signatures of all parties.”[x] The Parkland court noted that, “if the purported settlement agreement had not been reached in the context of court-ordered mediation, we would likely conclude that it was binding and enforceable: by February 7, 2022, both parties’ attorneys appeared to have agreed on the essential terms and had indicated that their clients were on board.”
New York Rules Require Written Settlement Agreements
Under Rule 2104 of the New York Civil Practice Law and Rules (CPLR), an agreement between parties or their attorneys relating to any matter in an action, other than one made between counsel in open court, is not binding upon a party unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered. With respect to stipulations of settlement and notwithstanding the form of the stipulation of settlement, the terms of such stipulation shall be filed by the defendant with the county clerk.
Can Email Exchanges Create Binding Settlement Agreements?
In 2000, Congress enacted the Electronic Signatures in International and Global Commerce Act[xi] which gives electronic signatures and agreements the same legal effect as paper documents with “wet” signatures. The corresponding state law is the Uniform Electronic Transactions Act (“UETA”).[xii] Almost every U.S. state, plus Washington D.C., Puerto Rico, and the U.S. Virgin Islands, has adopted UETA.[xiii] Because of these laws, email chains can produce binding contracts, including settlement agreements, in certain situations
Some New York courts have held that an email exchange between attorneys created a binding settlement agreement under CPLR 2104. In Alessina v El Gauchito II, Corp. [xiv] the court found, “The exchange of email correspondence between the attorneys for the parties setting forth all the material terms of the settlement and a manifestation of mutual assent was sufficient to constitute an enforceable settlement agreement between the parties.” Importantly, the parties had not conditioned their agreement on executing a written settlement agreement and release.
Similarly, in DT Net | REIT v. Coughlan[xv] the court found counsel’s email exchange “combined with the attached draft settlement agreement satisfy CPLR 2104. These documents contain the entire agreement and counsels’ signatures. The execution of releases (or a discontinuance in this case) does not change whether the parties have an enforceable settlement pursuant to CPLR 2104.”
Takeaways
- Enforceability of oral settlement agreements is governed by state contract formation law and applicable statutes and rules. Counsel should review these before a mediation or settlement conference.
- If rules or statutes don’t preclude it, oral settlement agreements can be enforced where there is evidence showing the parties’ mutual assent to an agreement’s material, essential terms.
- Unless parties require execution of a written agreement part of the settlement terms, email exchanges may create binding settlement agreements in some jurisdictions.
[i] The Statute of Frauds is a statute requiring certain contracts to be in writing and signed by the parties bound by the contract. The statute applies most commonly to contracts involving the sale or transfer of land, and contracts that cannot be completed within one year. https://www.law.cornell.edu/wex/statute_of_frauds
[ii] (1st Circuit, Docket No: 25-1219,January 29, 2026) https://law.justia.com/cases/federal/appellate-courts/ca1/25-1219/25-1219-2026-01-29.html
[iii] The opinion does not state whether the entire conference was conducted via Zoom.
[iv] The court found “no independent evidence of Ms. Maccarone’s impaired physical or mental capacity” or of any undue influence. . . .The court further observed that the case “smacks of buyer’s remorse,” which, it explained, is not a valid reason for denying enforcement of a knowing and voluntary settlement.”
[v] Citing Commonwealth Sch., Inc. v. Commonwealth Acad.Holdings LLC, 994 F.3d 77, 86 (1st Cir. 2021)
[vi] Citing Román Oliveras v. P.R. Elec. Power Auth. (PREPA), 797 F.3d 83, 85 n.2, 87 (1st Cir. 2015).
[vii] Fla. R. Civ. Proc.1.730 (b) Agreement. “If a partial or final agreement is reached, it must be reduced to writing and signed by each party or the party’s representative having full authority to settle under rule 1.720(c). Signatures may be original or electronic and may be in counterparts.” See also § 44.404(1)(a), Fla. Stat. (“A court-ordered mediation begins when an order is issued by the court and ends when ․ [a] partial or complete settlement agreement, intended to resolve the dispute and end the mediation, is signed by the parties and, if required by law, approved by the court ․”).
[viii]350 So.3d 484 (Fla. 2d DCA 2022).
[ix] Citing Warrior Creek Dev., Inc. v. Cummings, 56 So. 3d 915 (Fla. 2d DCA 2011); see also 11 Fla. Jur. 2d Contracts § 102 (2022) (“[I]t is not necessary for a party to be a signatory to a contract to be bound by its terms.”).
[x] Citing Dean v. Rutherford Mulhall, P.A., 16 So. 3d 284, 286 (Fla. 4th DCA 2009); see Gardner v. Wolfe & Goldstein, P.A., 168 So. 3d 1281 (Fla. 4th DCA 2015).
[xi] 15 U.S.C.§7001 et seq. commonly known as the “ESIGN Act.”
[xii] https://www.uniformlaws.org/committees/community-home?CommunityKey=2c04b76c-2b7d-4399-977e-d5876ba7e034
[xiii] New York has its own electronic signature law.
[xiv] 2023 NY Slip Op 04962, (New York Supreme Court, Appellate Division, Docket No: 2021-08890, October 4, 2023) https://law.justia.com/cases/new-york/appellate-division-second-department/2023/2021-08890.html
[xv] 2022 NY Slip Op 31381 – NY: Supreme Court 2022, https://scholar.google.com/scholar_case?case=11437412621637921741&hl=en&as_sdt=6&as_vis=1&oi=scholarr
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