What is the main difference Between Informal Settlement and Mediation?
Informal agreement is an agreement between the parties outside of court.
Generally, both parties may reach a verbal or written agreement regarding the use or division of properties, custody, and child support.
However, the court has discretion on the fairness of such division. In other words, if the Judge reviews the informal agreement, and it appears unfair or disproportionate, the judge can decide against it. Then, the court may order the parties to attend mediation or proceed to trial.
Mediated Settlement Agreement
On the other hand, mediation is a confidential, settlement option for the parties. Like an informal settlement agreement, it is also out of court. However, it must be in writing and signed by the parties entering the contract. It is literally a contract that will be filed with the court.
If any part of a mediated settlement agreement appears unfair or disproportionate on its surface, the court cannot intervene. One of the exceptions to this general rule is a victim of family violence. Given the nature of mediation, there are limited defenses against its enforcement. Most Texas courts highly scrutinize the use of general defenses of contracts such as duress and fraud in setting aside a mediated settlement agreement.
When you are not sure what to do in mediation, talk to a mediator. What do you need to accomplish in your case? Hire an attorney to assist you and advocate for your interest.
One more thing to note in informal settlement: negotiate! But, do not let your informal agreement be use against you in a court of law.
See Texas Rule of Evidence. Rule 408 – Compromise Offers and Negotiations.
(a) Prohibited Uses. Evidence of the following is not admissible either to prove or disprove the validity or amount of a disputed claim:
(1) furnishing, promising, or offering-or accepting, promising to accept, or offering to accept-a valuable consideration in compromising or attempting to compromise the claim; and
(2) conduct or statements made during compromise negotiations about the claim.
(b) Permissible Uses. The court may admit this evidence for another purpose, such as proving a party’s or witness’s bias, prejudice, or interest, negating a contention of undue delay, or proving an effort to obstruct a criminal investigation or prosecution.
Adding Rule 408 to your document protects its use in court. To be more specific, the goal is prevent the other side from using your negotiations as proof of liability.
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