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John, Attorney
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Experience:  Licensed and practicing attorney.
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Can I rescind a stipulation for settlement agreement if I was

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Can I rescind a stipulation for settlement agreement if I was given misinformation prior to signing?
Hi, My name is XXXXX XXXXX I’m happy to assist you with your question today.

You can rescind a settlement agreement for purpose of fraud in the inducement by the other party. The Cal Supreme Court has defined this to mean:

"The general contract rules that govern this case are as follows: If a party believes it has been fraudulently induced to enter into a contract, "`"n order to escape from its obligations the aggrieved party must rescind . . . ."'" (Rosenthal v. Great Western Fin. Securities Corp. (1996) 14 Cal.4th 394, 415 [58 Cal.Rptr.2d 875, 926 P.2d 1061], italics omitted.) The party's rescission obligations depend on the type of fraud alleged. Our state distinguishes between fraud in the execution or inception of a contract, and fraud in the inducement of a contract. (Ibid.) If the fraud goes to the execution or inception of the contract, so that the promisors do not know what they are signing, the contract lacks mutual assent and is void. It thus "`"may be disregarded without the necessity of rescission."'" (Ibid.) "`In the usual case of fraud, where the promisor knows what he is signing but his consent is induced by fraud, mutual assent is present and a contract is formed, which, by reason of the fraud, is voidable. . . .'" In that case, the party seeking to void the contract must rescind under our statutory and common law rules. (Ford v. Shearson Lehman American Express, Inc. (1986) 180 Cal.App.3d 1011, 1028 [225 Cal.Rptr. 895], italics omitted.) Rescission requires that the aggrieved party provide the other party to the agreement with "`prompt notice'" and an "`offer to restore the consideration received, if any.'" (Ibid.)

In your case you seem to be saying that you knew what you were signing but were misled as to the affect of the same. In that case, you'd have to declare a rescission, give back whatever you received and then re-file/re start whatever court proceedings you were involved in. The other party may attempt to fight the rescission, so you'll need proof that you were misled as a to some material element of the matter.

I believe this answers your question. However, if you need clarification or have follow-up questions regarding this matter, I will be happy to continue our conversation – simply reply to this answer. If you are otherwise satisfied with my response, please leave a positive rating as it is the only way I am able to get credit for my answers. Thank you, XXXXX XXXXX wish you all the best with this matter.

Customer: replied 3 years ago.

I This is a personal injury case and I signed the agreement at a mediation. The larger documents would come within 15 days for me to sign to settle. I was told by my attorney that I had better sign because my main witness, my doctor, wanted $100,000 to testify and he could not afford that. He also said we could not use his records or force him to court. The next day I found it was $10,000.00 or less for his fees and that we could use his records at any rate. I sent the lawyer a notice to rescind the next day. What do you think?


A couple of issues. First, you need to review the mediation agreement - specifically is it a full and final settlement of all claims (which would be enforceable against you) or is it just a preliminary agreement that the parties would just go to court and enter at some date in the future (which is not enforceable as an agreement). I suspect it is binding as most mediators these days are requiring the parties to enter binding agreements, but you'll need to review/talk to your attorney about that.

Second, a misrepresentation by your attorney to you is not fraud in the inducement as far as being able to rescind the deal. The fraud would have had to been from the other party. Your attorney is your agent and has the legal authority to act for you in a case. If you are ultimately bound to the deal, you may have a claim of malpractice against your own attorney for misleading you. But your own attorney's misrepresentations to you cannot be a basis for rescission.

Hope this helps. let me know if I can be of further assistance.
John and 13 other Legal Specialists are ready to help you
Customer: replied 3 years ago.

What happens if I do not sign the agreement when it arrives?

That will really depend on the other party's prerogative. I'd have to believe the other side would probably try to force the deal, depending on the enforceability of the mediation agreement itself. If its not enforceable then they may just continue the litigation.
Customer: replied 3 years ago.

How can I find out if this can be enforced as I cannot trust my attorney to give me the correct answers?

You can retain an attorney in your area to review it.; seek a second opinion before you sign
Customer: replied 3 years ago.

I am still having difficulties as every attorney I am talking to has a different take. I was told that legal mal practice cannot take place if you have a settlement. Is that true? I have not heard a word from my attorney as yet about the email and letter to rescind.

That's true. If you do accept the settlment that could be interpreted as evidence that the attorney's advice to you was acceptable to you to the point that you accepted settlement. You'd have to show your attonrye did not present you with all the information or provided you misinformation with the intent hide the facts from you.
Customer: replied 3 years ago.

Attorney did not have the amount of the bills owed including Medicare but told me not to worry about it. Second he told me that my main doctor that I had been seeing for 4 years wanted $100,000.00 to testify in my case and without him there was no case and he did not have the money. I called the doctor next day and that was not true. The doctor charged $10,000.00; however, the attorney owed him money and that is where the figure came from. I should not be punished for what the lawyer owed? Also he said I could not just use doctor's reports. I found out that was not true either. What do you think? there is so much more as well. I could not get reports, bills, etc. from him the whole time. I have none even though I repeated wrote and asked. He would not return phone calls. I had to have other attorneys call him to call me.

Clearly your not happy with the representation, you were misinformed intentionally about several material facts in your representation. I'm not going to tell you to attempt to rescind your deal or to file a malpractice claim - these are decisions you'll have to make on your own. If you don't rescind the deal, then your acceptance of the deal can be used as evidence that you in fact agreed with your attorney's actions. That's what you're dealing with, and I think you'd have a fairly good chance at a malpractice claim and attorney grievance.