Settlement Offers and the Importance of Following Directions

The other party has offered to settle. In some cases, you may know right away that you want to accept. Even if an offer looks great on the surface, there may still be ambiguities or unresolved questions that need to be addressed before you’re ready to sign on the dotted line. Before picking up the phone and calling the other side, it may be wise to consider if doing so has the potential to destroy the offer entirely.

White v. Cheek: Adjuster’s Voicemail Seeking Clarification Acted as a Rejection

One insurance company found out the hard way that the offering party is truly the “master of the offer.” When GEICO received a 22-page settlement offer from Cheek, who was allegedly injured by their insured, the adjuster had questions. In the offer letter, Cheek stated that all communications related to the offer “must be made in writing.” Instead of following Cheek’s directions, the adjuster called and left a voicemail saying that he received the offer letter and wanted some additional information.

Cheek took GEICO’s failure to follow his directions as a rejection of his offer. GEICO later tried to accept the offer by sending a letter agreeing to all of Cheek’s terms, including a check for the full offered amount. When Cheek refused and returned the check uncashed, the GEICO adjuster attempted to enforce the settlement.

In an opinion affirming the judgment of the trial court, the Georgia Court of Appeals noted that while an offeree can seek “reasonable clarification” about an offer without it being considered a counter-offer, nothing limited Cheek’s ability as the offeror to require that such requests be made in writing. Cheek was entitled to consider the other party’s failure to follow his directions as a rejection. Because an offer, once rejected, is forever extinguished, GEICO’s letter attempting to accept the offer could not create an enforceable agreement. Rather, GEICO’s response was merely a counter-offer, which Cheek was then free to reject.

Takeaway

Individuals and companies who find themselves on the receiving end of an enticing offer should take care in how they respond. An offeree has the power to create an enforceable agreement by the simple act of accepting; however, the offeree still has to play by the offeror’s rules. A hasty decision to call the other party or send an inquiring email could leave you empty-handed. The next time an offer letter crosses your desk, follow these guidelines:

1. Read the offer. This simple advice bears repeating. Read the offer. Some offers are lengthy, and language regarding communication can get lost, hastily skimmed, and forgotten in the excitement of receiving an offer.
2. Make note of all of the offeror’s requirements. As you’re parsing through the basic terms of the offer, pay attention to terms about communication between the parties and how the offer should be accepted.
3. Double-check the offer before contacting the offeror. Even if you’re calling to tell them to chill the champagne so you can toast your imminent agreement, make sure that your communication would not run afoul of the offeror’s requirements before the agreement is binding.

Mitchell-Handschuh: Atlanta Attorneys for Transportation and Logistics Companies

An experienced attorney can help you review your settlement offer and avoid potential landmines in communicating with the other party. If you have questions or need advice about a settlement offer, contact the experienced transportation and logistics attorneys at Mitchell-Handschuh. We are always ready to provide assistance.