During settlement negotiations, at a mediation or otherwise, the parties must remember that their discussions shouldn’t end with the big-ticket items (damages, costs, disbursements, etc.) because “deals” can fall apart over the small stuff: in this recent case, a fight over the wording of a Full and Final Release.
After agreeing on the big stuff, the parties couldn’t agree on the wording of the full and final release: most notably, whether the parties would be bound by a confidentiality and non-disclosure requirement demanded by the defendant but rejected by the plaintiff. The court ultimately concluded that this singular unresolved issue meant there was no settlement, and the defendant’s motion to enforce the settlement was dismissed.
In the analysis, the court pointed out that a settlement agreement is a contract: governed by offer and acceptance principles. Like any contractual analysis, the central task is to define the essential terms of the contract. The crux of this case stemmed on whether a confidentiality clause was an “essential term” versus a tangential term to the settlement (ie: the money had to be paid by money order rather than by cheque).
The defendant who wanted to enforce the settlement argued that the settlement occurred when the plaintiff’s offer to settle the litigation was accepted, and all that remained was the negotiation of the terms of the release. However, the court sided with the position of the responding plaintiff to the effect that there was no settlement reached because the defendant made the execution of release with a confidentiality clause an essential term of the agreement; an essential term that was specifically rejected.
It is noteworthy that implicit in every settlement is the delivery of a signed standard release: the parties do not have to discuss it. However, the implicit standard release is basically wording to the effect that the parties will not sue one another in the future over the same subject matter of the case, and little-to-nothing more. The court rejected the argument that in the year 2022 a standard implicit release should include a term that the parties keep the settlement private. The prudent course for a party seeking confidentiality is to bargain for it as part of the process of reaching a settlement agreement.
https://www.canlii.org/en/on/onsc/doc/2022/2022onsc5262/2022onsc5262.html
Bouzanis v. Greenwood et al., 2022 ONSC 5262