Settlements are Worthless Unless…

Settlements negotiated between two parties, written in a legal document and signed by both parties may have the appearance of being rock-solid and reliable. This is not the case…

When a contract is formed and signed, the resulting contract can be broken by one of the two parties. In this situation,  the damaged party would have to take the other party to court to enforce the legal contract. There is no enforcing agency outside of the court system for a contract. In other words, you can’t call the local law enforcement (police, sheriff, etc) to enforce the performance of a stipulated item or issue a penalty for nonperformance. If you go to court and the judge agrees that the negotiated contract is legal and should be honored by the other side, you won only half the battle.  There’s still more. You now have to go back to court to try to put an easement or garnishment on the other party. Here’s the BIG problem.   If that party goes bankrupt, you get nothing.  If the party protects assets via a trust protected against civil judgements, you get nothing. 

The only way to ensure the protection of the interests of the party expecting performance, especially if that performance is expected to be done in the future, is to negotiate a settlement that forces the performer to have 100 percent of the money needed for the stipulated item/performance put into an escrow account.  This should be done PRIOR TO any performance of the party expected to fulfill their end of the contract immediately.

Leave a Reply

Your email address will not be published. Required fields are marked *

This site uses Akismet to reduce spam. Learn how your comment data is processed.