- within Corporate/Commercial Law topic(s)
- in United Kingdom
Background
Manhattan Commercial Division Justice Robert R. Reed recently refused to enforce a settlement agreement purportedly reached by the parties via email in CoPilot Travel, Inc. v. Magstar Capital, LLC, 86 Misc. 3d 1271(A) [Supreme Court, New York County, 2025]. In CoPilot, the defendant Magstar attempted to persuade the court that the parties entered a binding settlement agreement based on a November 2024 email conversation.
The three emails forming the basis of Magstar's claim showed an exchange of the settlement document, with both sides providing edits to the draft. Both parties also expressed a willingness to get the matter settled in the email exchange. In the first email, counsel for CoPilot offered that CoPilot would be "willing" to enter into a settlement agreement. Magstar's counsel replied that Magstar was "amenable" to an agreement and asked CoPilot to send a draft of the agreement for review. After the draft was reviewed by Magstar, who returned it to CoPilot with revisions, CoPilot did not respond.
CoPilot then retained new counsel, with whom Magstar attempted to discuss the parties' purported settlement agreement. CoPilot refused to engage, much less execute the agreement as drafted.
Analysis
The court began its analysis by invoking CPLR § 2104, which provides that "[a]n agreement between the parties or their attorneys relating to any matter in an action... is not binding unless it is in a writing subscribed by him or his attorney or reduced to the form of an order and entered." An email exchange, the court explained, may be the basis for a binding settlement agreement if there is "consent in writing sufficient to meet the subscribing requirement," and if the "material terms" are "manifest" in the exchange.
The initial email sent by CoPilot in the exchange, was identifiable in its sender (CoPilot) and contained the material terms of the settlement offer ("both sides discontinue their claims and exchange mutual releases"). However, Magstar did not "explicitly" assent to the terms. Instead, Magstar said it was "amenable," which the court defined under the Cambridge Dictionary as "being willing to accept or be influenced by a suggestion," which, in turn, did not amount to an explicit assent to the agreement as provided. While Magstar argued that the email exchange with CoPilot's counsel were writings "subscribed by the parties that included all material terms," the court found that Magstar's counter-proposed agreement was not accepted through CoPilot's silence. The counter-proposed agreement was also unenforceable because it inserted new material terms, including "whether a party consents to limiting its communication and subjecting itself to penalty for 'disparaging' communication." To be enforceable, these new material terms concerning non disparagement, the enforcement of the settlement, and attorney's fees had to be expressly assented to, and based on the email exchange, they were not.
Magstar's motion to enforce the settlement agreement was therefore denied.
Takeaway
Attorneys seeking to enforce a settlement agreement based on an email exchange must take care to ensure that the material terms are manifest in the exchange and subscribed to by all necessary parties. Mere "agreements to agree," such as the emails and drafts exchanged in CoPilot, are not enforceable.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
