More About the Nature of a Binding Mediation Settlement Agreement

Thoroughly understanding the terms and conditions of a contract or any agreement is very important. For this reason, lawyers work to ensure that agreements contain no ambiguities. With a binding mediated divorce settlement, clearly written terms and full understanding are crucial. What happens if you realize later that you signed the agreement under the duress of your spouse?  Or suppose the courts recognize that the mediation agreement was ambiguous but parties signed it as a binding agreement? The answer to these questions became clear in a case where a couple mediated a binding Texas property settlement as part of their divorce.

Toler v. Sanders

In this particular case, the husband claimed that the mediated settlement agreement (MSA) was ambiguous and did not clearly reflect his and his wife’s agreed upon division of retirement benefits. He ended up owing his wife more of his retirement than he had foreseen. After signing the binding agreement, he first sought to return the issue to mediation. But he and his wife could not agree. He then fought to have a court set aside the agreement and moved for a new trial to settle their dispute.

The trial court denied his request, and his trial lawyer submitted the appeal of Toler v. Sanders to the Court of Appeals of Texas, First District, Houston. Under Texas law, there are two types of mediation settlement agreements: non-binding and binding. The appellate court in this case ruled that the agreement met the statute’s requirements for a valid MSA. It also stated that when incorporating the agreement into a decree, the Family Code does not authorize the court to modify an MSA — not for ambiguities, additions or any other reason. The court even ruled that an MSA was more binding than a basic written contract. However, a judge can overrule an MSA if he or she finds it is not in best interests of the child. In that case, you and your spouse may be back to the drawing board in your divorce agreement.

You must realize how binding your MSA is and thoroughly understand and agree with all aspects before signing it.