In Brewer v. National Railroad Passenger Corporation, Chester Brewer (“Brewer”) filed suit to recover damages for personal injuries he sustained during his employment with Defendant, National Railroad Passenger Corporation (“National”). Brewer claimed National was negligent in failing to provide him with a safe place to work. Prior to trial, the case was dismissed with prejudice based upon a settlement agreement negotiated by the parties’ counsel. The settlement agreement provided for a $300,000 settlement payment to Brewer, in exchange for his resignation from National.
Brewer later claimed he did not agree to resign his position with National, and he refused to sign the settlement agreement. National responded by filing a motion in the trial court seeking to enforce the terms of the settlement agreement. Brewer argued the oral settlement agreement was unenforceable since he did not agree to the provision regarding his resignation. National argued an oral agreement is enforceable if there is an offer, an acceptance of the compromise, and a meeting of the minds as to the material terms of the agreement. Moreover, National claimed a mistake or misunderstanding by one party is not sufficient to compel rescission of the settlement agreement where both parties agreed to the material terms.
The Illinois Supreme Court found the settlement agreement was unenforceable. The Court noted while oral settlement agreements are generally enforceable in Illinois, where a settlement agreement is reached out of court, a party cannot be bound unless it can be shown they consented to all material terms of the agreement. In this case, Brewer’s resignation was a material term that was not agreed upon by the parties. This case demonstrates that oral settlement agreements are enforceable if a party can demonstrate that all material terms have been agreed upon. If you have any questions concerning an oral settlement agreement and its enforceability, please contact a member of the firm.