Oral Agreements and Divorce Settlements

 Posted on December 00, 0000 in Collaborative Law

There are many alternatives to litigation when it comes to divorce, including mediation and collaborative law. When these alternatives are successful, the parties must still submit a final agreement to the court. A settlement agreement, after all, is a legally binding contract. But at what point is the settlement binding? Can you agree to a settlement and then change your mind at the last minute? A recent Illinois divorce case illustrates how courts may deal with such a scenario.

Court Rejects Husband's Effort to “Back Out” of Agreement

The parties in this case were married for about 16 years. The wife filed for divorce in 2013. Following a lengthy financial discovery process, their case was scheduled for trial at the end of 2015. At a scheduled deposition in October 2015, the parties opted to have a settlement conference instead.

The parties emerged from the conference with an oral agreement, which they presented to the trial judge. The wife's attorney read the terms of the deal to the judge. The judge then asked both the husband and wife if they had participated in the negotiation of these terms, that they understood those terms, and they “agree to bound” by the. Both spouses responded yes to all three questions. Based on this, the judge ordered a follow-up hearing, at which time the parties would present a final written agreement incorporating the terms of the oral settlement.

A week after stating he agreed to the settlement, the husband filed an emergency motion to replace his attorneys, cancel the follow-up hearing, and reset the case for trial. In effect, the trial judge said, the husband “wanted to 'back out' of the agreement because he did not 'like it.'” As the judge explained, however, the parties made an oral agreement, which was “valid in in Illinois.” The judge ultimately entered a final divorce order that followed the terms of the oral agreement.

The husband appealed, continuing to maintain there was never a genuine agreement. The Illinois First District Appellate Court disagreed with the man and upheld the lower court’s decision. The appeals court said the oral agreement presented to the judge was “sufficiently definite and certain to be enforceable when the trial court was able to ascertain what the parties had agreed to do.”

Illinois Law Changed in 2016

All that said, the case above was decided under an older version of Illinois divorce law. The old law stated that spouses could enter into a “written or oral agreement” to settle any outstanding property issues. As of January 1, 2016, the law omits the “oral or written” qualifiers. In fact, current law states an agreement “must be in writing, except for good cause shown with the approval of the court.” However, the new law does not apply retroactively, so oral agreements made prior to 2016 may still be enforceable.

This is just one illustration of how changes in the law can have a significant impact on a divorce case. An experienced DuPage County family law attorney can help make sure you are not caught unprepared. Call our offices today if you need help with a divorce or other family law matter.

Sources:

http://www.illinoiscourts.gov/R23_Orders/AppellateCourt/2017/1stDistrict/1153393_R23.pdf

http://www.ilga.gov/legislation/ilcs/ilcs5.asp?ActID=2086&ChapterID=0