A claim is often “settled” by the exchange of money for a release. The terms of the settlement are often put in writing and are sometimes supposed to be kept secret. If the secret is not kept what happens next?

In Gulliver Schools, Inc vs Snay, Mr. Snay agreed to keep his $80,000 settlement against the School secret. A few days later his daughter went onto her Facebook account and blabbed:

Mama and Papa Snay won the case against Gulliver. Gulliver is now officially paying for my vacation to Europe this summer. SUCK IT.”

Mr. Snay’s daughter had 1200 followers. Word of her facebook post quickly got back to the School. The School called their attorneys. The School then refused to pay his $80,000 settlement because he failed to keep it a secret. Mr. Snay’s excuse was that he had to tell his daughter how his claim turned out. That was no excuse said the court. There was nothing in the plain and simple settlement agreement allowing him to tell her anything.

Mr. Snay should have been more careful in drawing up the terms of his settlement. If it was so important that he had to be able to share the secret with his daughter, then the Settlement agreement should have permitted him to do so. He should also have made sure his daughter knew the dire consequences of blabbing about her dad’s good fortune on her facebook page.

Settlement agreements are contracts which can be enforced in a court of law. In this case Mr. Snay breached his agreement. The breach relieved the School of having to pay him any settlement.

The takeaway is that breaking a contract has consequences. This family has learned that the hard way. So, before you settle you case make sure you know all of the consequences of your settlement!

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