A long day of mediation can be exhausting, and it is not uncommon for the parties to reach agreement late in the day, everyone is tired and hungry for dinner, and someone says, “let’s just shake on the framework and paper it next week.” Most of the time that works fine. Occasionally, it becomes the subject of a motion to enforce, and New Hampshire law on when such a motion succeeds is more nuanced than most practitioners may think.
The baseline rule is straightforward. Settlement agreements are contracts, and New Hampshire applies ordinary contract principles to them. As the Supreme Court put it in Poland v. Twomey, 156 N.H. 412, 413 (2007), “a valid enforceable settlement requires offer, acceptance, consideration and a meeting of the minds,” which exists when the parties share an objective, manifested understanding of the essential terms, not when each side privately believes they got what they wanted. Critically, Poland also confirms that New Hampshire “jurisprudence strongly favors enforcement of settlement agreements made by authorized attorneys acting on behalf of their clients,” and that a court can order specific performance—effectively substituting a court order for a release the client refuses to sign—once the essential terms are established. Id. at 416. That is a meaningful backstop for the party who negotiated in good faith, had an oral settlement agreement resulting from mediation, and the other side has buyer’s remorse overnight.
But there is a key exception that practitioners need to consider: agreements involving the transfer of an interest in real property. In The Byblos Corp. v. Salem Farm Realty Trust, 141 N.H. 726 (1997), the parties negotiated an all-day settlement of related litigation, memorialized in memoranda prepared by each side at the end of the session. That is the kind of documentation many practitioners would consider more than sufficient. However, the Supreme Court held that because the settlement included a land conveyance, it implicated the statute of frauds, RSA 506:1, and therefore required a writing signed by the party to be charged. Id. at 731. Nonetheless, the Court preserved a narrow exception for settlements “finalized under court supervision,” and reaffirmed that an attorney’s authority to settle a case for a client need not itself be in writing. But the agreement between the adverse parties, if it touches real property, generally does. Id.
Read together, Poland and Byblos Corp. draw a line that is not always intuitive at the mediation table. Specifically, a settlement resolving a contract or tort dispute for a sum of money can bind on a handshake and a confirming email once the essential terms are objectively fixed. But a settlement of the same dispute that happens to include an easement, a boundary adjustment, a lease term, or other transfer of an interest in land needs a signature, unless the court itself supervised the resolution closely enough to substitute for that formality.
As for practice pointers coming out of these decisions: If your matter involves any interest in land, even tangentially, practitioners should get signatures at the mediation table or build in an unambiguous mechanism for court supervision, in order to ensure that the settlement resulting from mediation is enforceable. If the agreement in principle does not involve land, it is still wise to memorialize the essential terms in writing before everyone leaves the mediation, as Poland‘s “meeting of the minds” standard is forgiving, but a term sheet is always preferable. While mediation can often be seen as desirable because of the sense that the process is collaborative and human rather than adversarial and documentary, practitioners should avoid the instinct to treat “we’ll paper it next week” as good enough whenever land is even tangentially involved — because next week is when second thoughts can arrive.