The Court of Appeals of Georgia has found a settlement agreement lacking in the essentials of contract formation where an offeree unequivocally accepts the terms of settlement by offeror but issued a payment check that stated on its face "VOID IF NOT PRESENTED WITHIN 90 DAYS." Patrick v. Kingston, A23A1527, 2024 Ga. App. Lexis 53 (2024). While the case deals specifically with OCGA § 9-11-67.1, the analysis is rooted in basic contract formation. Businesses and individuals should assume the holding from this case applies to any settlement, whether related to a personal injury or otherwise.
In Patrick, the plaintiff proposed terms for an offer of compromise to the defendant insurance company, which "was conditioned on being accepted unequivocally and without variance of any sort." Id. at 3 (internal citations omitted). The insurance company then sent a response letter to Plaintiff's counsel "noting that it was unconditionally, unequivocally and without variance accepting the terms and conditions of your offer of settlement. . . [and] would send the payment and release to your office within the time period set forth in your offer of settlement." Id. at 8. The insurance company did promptly and timely tender that check, however, on its face, the check stated: "VOID IF NOT PRESENTED WITHIN 90 DAYS." Id. at *12-13.
In Georgia, when "the recipient of a pre-suit offer fails to perform the act required to accept the offer, then the parties do not have a meeting of the minds." Pierce v. Banks, 368 Ga. App. 496, 502 (2023).(internal quotations omitted). Further, a "purported acceptance of an offer that varies even one term of the original offer is a counteroffer." Pritchard v. Mendoza, 357 Ga. App. 283, 288 (2020). Ultimately, because of this strict adherence to contract formation, the Court of Appeals found there was no formation of a settlement agreement because of the additional term on the face of the check. Patrick, 2024 Ga. App. Lexis 53, *15.
This case should come as a practice tip for all attorneys. In the Pierce case, the Court of Appeals specifically noted that a party has many payment options, with checks only being one. Pierce, 368 Ga. App. at 502. Therefore, when paying settlement funds a write transfer may still be the best option. Otherwise, the Patrick case will require that you confirm there are no additional terms on the face of the check.