The court found that the parties entered into a binding settlement agreement at the conclusion of mediation, the terms of which were embodied in an e-mail agreement. The e-mail correspondence is sufficient to embody a settlement agreement since it was authentic and sets forth all material terms. The settlement agreement specifically states that it is "subject to a formalized Settlement Agreement." In analyzing such language, courts must determine whether the parties have merely come to a preliminary agreement to agree, which is not enforceable, or a binding agreement, by determining whether there has been an explicit reservation that there would be no contract until the full formal document is completed and executed.
The parties' use of the phrase "subject to," standing alone, does not amount to an express reservation of the right not to be bound or a condition precedent to the formation of a binding contract. Instead, the "subject to" language indicates the parties' expectation that they would come to a final agreement as a mere formality, not as a condition precedent to a binding settlement agreement. The parties' subsequent actions - including their correspondence with each other, their co-counsel, and the court - all indicate their respective understandings that the parties had come to a final settlement agreement resolving the related action in federal court.
Go N.Y. Tours, Inc. v. Tour Cent. Park Inc., NY Slip Op 02457 (1st Dep't May 9, 2023)
