Reasonable Time to Accept Settlement Offer (is a Question of Fact)
How long does a settlement offer remain pending before it dies on the vine? There is no definite answer here meaning if you extend a settlement offer and it has not been accepted, make sure to formally rescind the offer before it has been accepted. That is the safe bet. Otherwise, it may get accepted when you thought the offer expired due to time and now you are fighting over whether the offer was still valid.
This was the situation in Sakowitz v. Waterside Townhomes Community Association, Inc., 47 Fla.L.Weekly D583b (Fla. 3d DCA 2022). Here, the plaintiff extended a settlement offer to defendants on February 4, 2020. After thirty days, on March 4 2020, the defendants made a counter-offer. We know what happened next. COVID-19. Eighty-Five days after the defendants made the counteroffer, the plaintiff accepted. The defendants, however, tried to argue “too late,” claiming their offer expired due to time. But did it expire?
The plaintiff moved to enforce the settlement agreement. After an evidentiary hearing, the trial court granted plaintiff’s motion to enforce the settlement. The trial court did not deem the eighty-five day delay unreasonable in light of the world facing the COVID-19 pandemic.
The defendants appealed arguing the offer expired because it was not accepted within a reasonable time. The appellate court disagreed with the defendants and affirmed the trial court’s enforcement of the settlement. The appellate court reasoned:
A reasonable time is “ordinarily . . . a question of fact, the determination of which will depend upon all of the circumstances surrounding the particular offer and acceptance.” 1 Richard A. Lord, Williston on Contracts § 5:7 (4th ed. 2021). It can, however, be measured as “the time that a reasonable person in the exact position of the offeree would believe to be satisfactory to the offeror,” Corbin, supra, § 2.16, giving due consideration to the “the nature of the proposed contract, the purposes of the parties, the course of dealing between them, and any relevant usages of trade.” Restatement, supra, § 41 cmt. b.
Here, although the Association waited eighty-five days to effectuate acceptance, the counteroffer was formulated nearly one month after the original offer was extended. This suggests the parties were deliberate and unhurried in their course of dealing.
Further, as aptly observed by the trial court, the offer in this case was extended on the proverbial eve of the COVID-19 global pandemic. Less than two weeks later, many court operations were suspended and protective measures were implemented. See Fla. Admin. Order No. AOSC20-13 (Fla. Mar. 13, 2020) (on file with Clerk, Fla. Sup. Ct.) (suspending, among other things, all civil jury trials through March 27, 2020, in light of COVID-19 global pandemic); Fla. Admin. Order No. AOSC20-23, Amend. 1 (Fla. May 4, 2020) (on file with Clerk, Fla. Sup. Ct.) (extending suspension through July 2, 2020). Indeed, the Association demonstrated at the evidentiary hearing that after the offer was extended, its attorney fell ill and his law offices closed. Other impediments to acceptance included the delay of necessary board approval, presumably precipitated by restrictions affecting travel and gatherings.
Please contact David Adelstein at [email protected] or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.