Fernandez v. Fernandez

[CONTRACT LAW]

In Fernandez v. Fernandez,[1] the supreme court held that, if so provided by the terms of a settlement agreement, parties can return to “square one” after being unable to, in good faith, fulfills the antecedent terms of the agreement.[2] After David and Cynthia separated, they reached a settlement where Cynthia would pay David $33,000 through a second mortgage on her home.[3] However, if Cynthia could not obtain the mortgage, the parties would negotiate an alternative payment plan in good faith; if no agreement resulted, they would return to “square one” and figure things out from that point.[4] When this point was reached, the lower court imposed settlement terms upon Cynthia instead of allowing her to return to “square one.”[5] On appeal, she argued the lower court had no authority to do that because the parties merely agreed to negotiate, not agree.[6] The supreme court reversed the lower court’s decision, reasoning that in an agreement to negotiate, parties retained the right to refuse proposed terms.[7] In their settlement, Cynthia and David had not established a specific negotiation process, method of settling disputes or agreed a court could dictate settlement terms.[8] Reversing the lower court’s decision, the supreme court held that under the parties’ settlement agreement, a party could return to “square one” after being unable to, in good faith, fulfill the antecedent terms of the agreement.[9]

 



[1] 312 P.3d 1098 (Alaska 2013).

[2] Id. at 1104.

[3] Id. at 1099–1100.

[4] Id.

[5] Id.

[6] Id.

[7] Id. at 1104.

[8] Id.

[9] Id. at 1105.

Fernandez v. Fernandez

[CONTRACT LAW]

In Fernandez v. Fernandez,[1] the supreme court held that, if so provided by the terms of a settlement agreement, parties can return to “square one” after being unable to, in good faith, fulfills the antecedent terms of the agreement.[2] After David and Cynthia separated, they reached a settlement where Cynthia would pay David $33,000 through a second mortgage on her home.[3] However, if Cynthia could not obtain the mortgage, the parties would negotiate an alternative payment plan in good faith; if no agreement resulted, they would return to “square one” and figure things out from that point.[4] When this point was reached, the lower court imposed settlement terms upon Cynthia instead of allowing her to return to “square one.”[5] On appeal, she argued the lower court had no authority to do that because the parties merely agreed to negotiate, not agree.[6] The supreme court reversed the lower court’s decision, reasoning that in an agreement to negotiate, parties retained the right to refuse proposed terms.[7] In their settlement, Cynthia and David had not established a specific negotiation process, method of settling disputes or agreed a court could dictate settlement terms.[8] Reversing the lower court’s decision, the supreme court held that under the parties’ settlement agreement, a party could return to “square one” after being unable to, in good faith, fulfill the antecedent terms of the agreement.[9]

 



[1] 312 P.3d 1098 (Alaska 2013).

[2] Id. at 1104.

[3] Id. at 1099–1100.

[4] Id.

[5] Id.

[6] Id.

[7] Id. at 1104.

[8] Id.

[9] Id. at 1105.