Mediated Settlement Term Sheet Upheld Against Claims of Uncertainty and Mistake
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Mediation between two accountants resulted in a signed term sheet dividing the work and compensation from clients of a third accountant in their office who unexpectedly died. The term sheet expressly stated it was “binding and enforceable,” but also required a “complete” settlement agreement to be prepared and signed two weeks later. The day before the deadline, counsel for one party stated that his client had made an error and wished to return to mediation. Litigation followed in which the mediation term sheet was upheld; the appellate court rejected assertions that the term sheet was uncertain or based on a mistake. The court concluded that the mere fact that a more formal agreement was to be prepared did not invalidate the term sheet, if it was otherwise enforceable. Nor did the absence of a list that was to be attached cause problems, as there was no dispute over the subject matter of the list. The appellate court also rejected unilateral mistake as grounds for overturning the term sheet where a party merely had second thoughts after signing the agreement.
Newman v. Jerome Leventhal Accountancy Corp., No. B237166 (Cal.
App. 2d Dist., September 12, 2013)
Tags: term sheet
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