Entering into a stipulation of Settlement is an important event in the course of any litigation.

A stipulation is a written agreement entered into by the parties to a lawsuit through their lawyers if they are represented, or by the parties themselves if they are not. This agreement will lead to the end of a lawsuit as it will most likely include a provision for having a document known as a Stipulation of Discontinuance filed with the Court. The lawsuit terminates with the filing of the Stipulation of Discontinuance.

Often times, a the stipulation is entered into in the courtroom in the presence of the Judge, the attorneys and the parties.  This is known as an “open court stipulation”. These stipulations tend to come about before a case is submitted to a jury at trial.

So, what happens if one of the parties to a stipulation is unhappy after the fact and wants to vacate the Stipulation?

Will the Court simply grant a mulligan and allow the agreement to be cast aside on a party’s motion to vacate? The Answer is probably not.

A stipulation is at its core, a contract. Such agreements are governed by the law of contracts, and a party will not be relieved of his or her obligations pursuant to the agreement without a legitimate basis for invalidating a contract, such as:

  • fraud,
  • collusion,
  • duress,
  • mistake or
  • accident.

These are difficult grounds to prove. There are many decisions denying such applications in the New York reports. Stipulations are favored by the courts and will not be set aside without very good reason. The other party to the stipulation will undoubtedly fight long and hard to prevent the undoing of a stipulation so it is important that the agreement not be entered into unless the party knows exactly what he or she is agreeing to and what promises have been made to base that agreement upon.