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When Is a Lawyer-Negotiated Settlement Binding?

A settlement worked out between the lawyers in a Georgia divorce is binding once three things are shown, even if you never signed it.

The Three-Part Test

In Gravley v. Gravley, 278 Ga. 897 (2005), the Georgia Supreme Court held that a trial court must acknowledge a settlement once it is shown that (1) the attorney had “plenary authority to bind the party to the agreement,” (2) “the court was informed that a settlement had been reached,” and (3) “a settlement agreement incorporating the essential terms of the agreement has been prepared.” There, the lawyers announced the settlement in court and drafted the decree, and the husband’s later refusal to sign did not matter.

The first element is your lawyer’s apparent authority, which a separate post explains.

No Signature Required

In Ray v. Ray, 263 Ga. 719 (1994), counsel for both sides acknowledged that “they had achieved settlement on all issues,” and the husband refused to sign. The Supreme Court enforced it “regardless of whether appellant signed the agreement,” because “[l]etters or documents prepared by attorneys which memorialize the terms of the agreement reached will suffice.”

When a Writing Is Needed

OCGA 15-19-5 gives attorneys authority to bind their clients “by any agreement in relation to the cause, made in writing.” Brumbelow v. Northern Propane Gas Co., 251 Ga. 674 (1983), read that narrowly: the writing goes “to the certainty that an agreement exists and to the certainty of the terms of the agreement, not to the question of consent of the client.” So if the only dispute is your lawyer’s permission, no writing is required. In Ford v. Hanna, 293 Ga. App. 863 (2008), a client who disputed only her lawyer’s authority, not the terms, learned that “there was no necessity that the agreement be in writing.”

Whether every essential term was agreed remains open, and that rule has its own post.

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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!

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