In Georgia, there is no settlement agreement until every essential term has been agreed to. Leave one for later and there is nothing to enforce.
The Rule
“No contract exists until all essential terms have been agreed to,” and “the failure to agree to even one essential term means there is ‘no agreement to be enforced.’” Reichard v. Reichard, 262 Ga. 561 (1992). That follows from OCGA 13-3-2: “until each has assented to all the terms, there is no binding contract.” An agreement that leaves an essential term to be settled later is an unenforceable “agreement to agree.” Kreimer v. Kreimer, 274 Ga. 359 (2001).
What Counts as Essential
In Moss v. Moss, 265 Ga. 802 (1995), the spouses signed a mediated agreement that the husband would transfer real estate of a specified value to the wife, with the method of appraisal to “be agreed upon by the attorneys.” The Georgia Supreme Court held the agreement unenforceable. The appraisal method was a substantive term, and “[t]he missing term could not be supplied by the trial court.”
Steele v. Steele, 298 Ga. 548 (2016), lists the core essentials: “the subject matter and purpose of the contract, the identity of the parties, and the consideration.”
Nonessential Details Can Wait
In Kreimer, a settlement memorandum divided publicly traded stock equally by after-tax value but left which particular shares each spouse would receive to “be by mutual agreement.” The Supreme Court enforced it. Because the point of the deal was equal after-tax value, “the decision which particular shares of stock will actually be transferred is a non-essential element of the settlement agreement.” Likewise, in Steele, omitting a beach house’s address and the names of lawsuits to be dismissed did not matter, since nobody disputed which were meant.
So the question is not whether something was left open, but whether what was left open goes to the heart of the bargain.
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This post is a quick overview of the law and is not intended as legal advice. Please feel free to contact our office for a consultation if you have questions about this or any other legal aspects regarding your case!