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Can an employee change their mind about a settlement agreement after signing it?

30 January 2019

Ask Partners – Common questions on settlement agreements

As experts in drafting and advising on settlement agreements, we do come across questions which are difficult to get your head around. We have created a series of ‘Ask Partners’ where we address questions on tricky issues within settlement agreements.

Can an employee change their mind about a settlement agreement after signing it?

Whether or not an employee is able to change their mind, after acceptance, will turn on issues of contract formation and whether or not a legally binding contract was already in existence.

A legally enforceable contract will only arise where all the required elements (offer, acceptance, consideration, intention to create legal relations, and certainty of terms) are present. That is a question of fact.

As a general rule, though, a contract is made at the time (unqualified and final) acceptance is communicated to the offeror. Where an agreement was signed and clearly communicated to the employer prior to the employee's later rejection, this would on the face of it appear sufficient to amount to valid acceptance in contract law terms. If all the other elements of a legally enforceable contract were present at this point, then the agreement is likely to be binding and a later change of heart from the employee would not change that. You will need to assess this against your knowledge of the facts.

Stay tuned for more frequently asked questions on settlement agreements…

 

 

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