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How Binding is your Agreement?

Apr 2, 2019 | Divorce

The Texas Family Code allows parties to enter into a binding settlement agreements in both divorce and child custody cases. Binding settlement agreements are generally the result of the mediation process, which is required in almost every family case in Houston Courts.

binding agreement

Section 153.0071 of the Texas Family Code, governs mediated settlement agreements and states that they are binding on the parties if the agreement meets all of the requirements under Subsection (d). The three requirements under this Subsection states that each party should be a signatory to the agreement, as well as, the party’s attorney or anyone present at the time of the agreement signing. Also, “a prominently displayed statement that is in boldface type or capital letters or underlined, that the agreement is not subject to revocation,” is provided.

Under Subsection (e) of the Tex. Fam Code 153.0071 then states that, “If the mediated settlement agreement meets all three of these requirements, a party is entitled to judgment on the terms of the mediated settlement agreement.” Tex. Fam. Code 153.0071(e). If parties come to an agreement that fully comports with section 153.0071, then the court shall enter a judgment based on the terms of the agreement.

Can the parties agree to change or revoke their mediated settlement agreement?

Simply put, no. The parties cannot agree to change or revoke their mediated settlement agreement. In re Minix, 2018 Tex. App. LEXIS 1489 (Tex. App.– Houston [14th Dist.] Feb. 27, 2018, orig. proceeding) (Cause No. 14-17-00417-CV). Often, the parties have buyer’s remorse and want to change all or some of the terms of the agreement. Unfortunately, the parties cannot change their minds after the mediated settlement agreement has been properly entered into.

Section 153.0071 of the Texas Family Code, neither permits the parties to change the terms on the mediated settlement agreement nor revoke it entirely. Even if both parties are in complete agreement to revoke the mediated settlement agreement and enter into a new agreement, the Texas Family Code prohibits this. Tex. Fam. Code 153.0071. If the mediated settlement agreement complies with this section, the court must enter judgment on the agreement. Tex. Fam. Code 153.0071(e).

This principle, prohibiting changes or revocation to a mediated settlement agreement, is further supported by a recent opinion out of the Fourteenth Court of Appeals Houston. The Court held that parties may not set aside their mediated settlement agreement that fully comports with section 153.0071. The Court’s holding applies whether both parties agree to set aside the agreement or agree to not enter the agreement for judgment. In re Minix, 2018 Tex. App. LEXIS 1489 (Tex. App.– Houston [14th Dist.]. The Court further held that parties may not use stipulations or other forms of contract law, such as rule 11 agreements, to avoid the binding effects of their mediated settlement agreement. In re Minix, (Tex. App.– Houston [14th Dist.].

Are you sure you agree to your own mediated settlement agreement?

Mediated settlement agreements are an excellent way for parties to resolve issues, without the high expense of litigation, amicably. However, parties should be extremely cautious of what their agreements entail, and be certain it is the agreement they want the Court to render a judgment on. A major benefit of a mediated settlement agreement is that it allows parties to make their own decisions, and prevents the Courts from changing or modifying those decisions. Similar to the courts, once the mediated settlement agreement is entered into, each party is bound by its terms and cannot make modifications.



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