Can a Settlement Offer Be Rescinded?

After an accident, settlement negotiations often move quickly. Insurance companies may make an offer to resolve a claim before a lawsuit is filed or while a case is pending. This raises an important legal question: can a settlement offer be rescinded? In many situations, the answer depends on timing and whether the offer has been formally accepted. Once an offer is accepted under circumstances that create a binding agreement, it is legally enforceable. Because misunderstandings about acceptance, deadlines, or documentation can significantly affect the outcome of a case, you should consult with a New York personal injury lawyer before responding to a settlement offer. Understanding when an offer can be withdrawn is critical to protecting your rights and preserving the full value of your claim.

What is a Settlement Offer?

A settlement offer is a proposal to resolve a legal claim without going to trial. In personal injury cases, it is typically made by an insurance company on behalf of the at-fault party, though injured individuals can also make settlement demands. The offer usually includes a specific dollar amount in exchange for releasing all claims related to the accident and permanently resolving the case. Accepting the offer generally requires signing a written release agreeing not to pursue further legal action. Settlement offers may be communicated in writing, by email, or sometimes verbally. They may also include deadlines or specific conditions that must be satisfied before the agreement becomes final.

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When Can a Settlement Offer Be Rescinded?

Whether a settlement offer can be rescinded depends largely on whether it has been accepted. In general, an offer may be withdrawn at any time before it is clearly and properly accepted. This means an insurance company can revoke, modify, or withdraw a settlement proposal if the other side has not yet clearly agreed to its terms. Offers also expire if a stated deadline passes without acceptance. Once an offer has been properly accepted, however, the situation changes. If both sides agree to the essential terms of the settlement, a binding agreement is formed. At that point, rescinding the offer is generally not permitted absent a valid legal basis. Disputes sometimes arise over whether acceptance was properly communicated or whether the agreement was complete. The outcome often depends on timing, the method of communication, and whether the parties agreed to all material terms.

What Counts as Acceptance of a Settlement?

A settlement offer is not binding until it has been clearly accepted. Acceptance must be clear, definite, unconditional, and communicated in a manner that creates an enforceable agreement. If the response changes the terms of the offer in any way, it may be treated as a counteroffer rather than an acceptance. In many personal injury cases, acceptance is confirmed in writing. In New York, settlements are generally enforceable only if they are in writing or placed on the record in court. Verbal discussions during negotiation often do not create a binding agreement, especially if important terms remain unresolved. Because small communication details can determine whether an agreement is enforceable, clear responses to settlement offers are critical.

Can an Insurance Company Withdraw an Offer After It Has Been Accepted?

If both sides have agreed to the essential terms of the settlement and the agreement satisfies requirements for enforceability, the insurance company typically cannot rescind the offer simply because it has reconsidered or believes the amount was too high. Disputes sometimes arise when the parties disagree about whether acceptance occurred. For example, questions may surface about whether the acceptance was timely, unconditional, or properly documented. If no enforceable agreement was formed, the offer may still be withdrawn. It is strongly recommended that you do not communicate directly with the insurance company about settlement terms and instead allow your lawyer to handle those discussions on your behalf.

Can You Withdraw Your Own Acceptance?

The same principles apply to the injured party. Once you have accepted a settlement offer and a binding agreement has been formed, withdrawing that acceptance is extremely difficult and, in many cases, not possible. Settlement agreements are contracts. Courts are reluctant to undo them unless there is a recognized legal reason, such as fraud, material misrepresentation, mutual mistake, or duress. For example, if a settlement was based on false information or a significant misunderstanding about a key fact, a court may consider whether the agreement should be set aside. However, simply regretting the amount accepted is not enough to rescind a settlement. Because settlement agreements are final, it is important to evaluate the full scope of damages and future risks before formally accepting an offer.

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Why Timing Matters in Personal Injury Settlements

Settlement offers are often made at strategic moments. In some cases, an insurance company may present an early offer in an effort to resolve your claim quickly and limit its financial exposure before the full extent of your injuries and damages is known. Accepting too quickly can prevent you from recovering additional compensation if your condition worsens or requires further treatment. On the other hand, waiting too long to respond carries risks as well. Offers may include deadlines, and circumstances can change as new evidence develops. An insurer that initially proposes a certain amount may later adjust its position based on updated medical records, liability disputes, or litigation strategy. Because a settlement typically requires signing a release that ends the claim permanently, timing is critical. Once finalized, a settlement generally cannot be reopened simply because the injury turned out to be more serious than expected. Carefully evaluating the current evidence, future medical needs, and overall case value before accepting an offer will help prevent avoidable disputes or regret later.

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Protecting Your Rights During Settlement Negotiations

Settlement decisions have lasting consequences. Once an agreement is finalized, it typically brings a claim to a permanent close. Taking the time to fully understand the true value of your case is essential before accepting any settlement offer. At Friedman & Simon, L.L.P., we recognize that no two injuries and no two cases are alike. Every case deserves personalized attention and a strategy tailored to your specific goals. We combine compassionate client service with determined advocacy focused on protecting the full value of your claim. If you have received a settlement offer and are uncertain how to proceed, our New York personal injury attorneys are committed to helping you recover the full and fair compensation you are entitled to. Based on our decades of experience, we can evaluate any settlement offer and advise you whether it reflects the true value of your case and your long-term needs. We will work to ensure that any settlement you accept fully compensates you for both your current and future losses. Call us today to get started with a free consultation.

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