Legal Memorandum: Enforceability of a Verbal Settlement

Issue: Is a verbally approved settlement by a Fair Housing Act complainant and reported to an administrative law judge enforceable if the written agreement was not signed by the complainant?

Area of Law: Administrative Law, Administrative Law & Regulation (Federal and State), Business Organizations & Contracts, Government Programs and Benefits, Litigation & Procedure, Real Estate Law
Keywords: Oral settlement; Written agreement; Enforcement
Jurisdiction: Federal, Puerto Rico
Cited Cases: 685 F. Supp. 2d 229; 884 F. Supp. 635; 616 F.2d 1006
Cited Statutes: 42 U.S.C. § 3612(e), § 3610(d)
Date: 04/01/2013

See Metropolitan Housing Dev. Corp. v. Village of Arlington Heights, 616 F.2d 1006 (1980).  “[U]nder the Fair Housing Act national policy . . . strongly favors settlement where . . . the settlement is fair, adequate, reasonable and appropriate under the particular facts and that there has been valid consent by the concerned parties.”

See Quint v. A.E. Staley Mfg. Co., 246 F.3d 11 (1st Cir. 2001).  “Quint’s argument, that when the parties to an agreement contemplate a written document will memorialize a contract, there can be no agreement until the document is executed, is a radical and doomed departure from the principles of contract law.  If that were so, for example, no party could ever settle in the court-house by oral agreement.  But that is not the law.  There are certainly instances in which no oral contract is formed where material terms are not yet agreed upon, and no agreement is reached until there is written agreement embodying those material terms.  Here, the material terms were agreed upon, and Quint cannot escape the consequences of her agreement because she spoke but did not write.  And Quint’s argument that her attorney had authority to bargain but not to settle in the absence of a written agreement is under-cut by the district court’s factual findings and by Quint’s own verbal assent to the settlement.  We add that there was nothing unfair about the bargain reached; some might have urged Quint to take the money and count it a victory.”

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