What is the law regarding the validity of settlement agreements and on what ground might they be deemed as invalid?
Settlement agreements are legally binding documents that once signed place responsibilities on each party while bringing a dispute to a close. Because they are legally binding, it’s often assumed that they need to be signed in order for them to be valid. In some instances, parties to settlement agreements have tried to rescind their agreement because they claim their signature wasn’t witnessed and therefore isn’t valid.
Does A Settlement Agreement Need To Be Witnessed?
A settlement agreement does not have to be witnessed in order for it to be valid and for the parties to the agreement to be bound by its contents. This means that as soon as the document is signed by both parties it becomes legally binding. It can then only be rendered null and void if an extreme condition can be demonstrated.
What Should You Check Before Signing A Settlement Agreement?
Once an agreement has been reached with an employer, they should then provide a written copy. Verbal agreements can help shape the contents of an agreement but they are not legally binding agreements and are usually excluded by the terms of the settlement agreement.
Once you’ve received the written copy you should check that it actually contains what was agreed verbally or via other forms of communication. It should include the specific dispute that’s being discussed. It should clearly set out what the employer and employee have agreed to do, the amount of any compensation you’re due to receive and the details of any restrictive covenants that you have agreed to.
The document will also need to meet the rules regarding settlement agreements. If these conditions are not met, then the agreement is not legally valid and this could be used by an unscrupulous employer to avoid paying the agreed settlement amount.
If you discover that a settlement agreement that you have signed is invalid, you will still be able to make an employment tribunal claim against your employer.
Before You Sign A Settlement Agreement
Parties to a settlement agreement need to be certain that signing the document is in their best interests and that they are clear about what it contains. If you have been working with a legal specialist to negotiate the settlement agreement they will be able to advise about the document itself. They will be able to verify that it meets the requirements for validity and includes what has been agreed.
Should the agreement fail to meet these criteria they will then advise about the best course of action, whether that is a further legal action, renegotiating the terms of an agreement or redrafting the document.
The experienced team of employment specialists at Freeman Jones can help you negotiate a settlement agreement that meets your priorities and brings your dispute to a satisfactory end.