In Discover Bank v. Ryan, the defendant filed an emergency motion to enforce a post-trial settlement agreement, claiming that the parties had entered into an agreement to resolve the case for if the defendant withdrew her appeal.
Upon receipt of the settlement agreement, which had been prepared by the plaintiff, the defendant requested three modifications, which included changing her name designation, adding two account numbers and making certain paragraphs of the agreement apply to both plaintiff and defendant. The plaintiff agreed to one of the requested changes, but refused to comply with the other two requested modifications. Plaintiff informed defendant that if they did not receive the signed settlement agreement by a certain date, the plaintiff would withdraw the offer of settlement. Defendant argued in her emergency motion that the plaintiff did not have the right to withdraw the settlement offer that the defendant had previously accepted, because the requested modifications did not prejudice the plaintiff.
The court denied the motion, finding that the defendant never accepted the plaintiff’s initial offer. The court found that a reply to an offer which purports to accept the offer but instead changes the terms is not an acceptance, but rather, a counteroffer, which had the effect of terminating the original offer. Under Pennsylvania law, an acceptance must be unconditional and absolute. As the defendant never unconditionally accepted the plaintiff’s offer, it was terminated, and therefore the defendant’s emergency motion was denied.
Thanks to Alexandra Perry for her contribution to this post and please write to Mike Bono for more information.