Can I sue for a breached settlement agreement? The check bounced.

I originally signed a settlement agreement with my former employer not to litigate claims against the company. The settlement agreement was signed by myself and the company. A check was issued on the scheduled date identified in the contractual agreement. Upon receipt of the check I deposited the check into the bank and the check came back as insufficient funds. My bank turned me over to the fraud department. The fraud department put me on alert and the bank had meetings to decide whether they wanted to keep me as a customer. As a result the company later issued me another check but did not even acknowledge any wrong doings or pay the fees I was charged by my bank. I think my contract was breached at this point.

1 answer  |  asked Jan 14, 2010 9:04 PM [EST]  |  applies to Ohio

Answers (1)

Neil Klingshirn
It appears that the employer breached the contract by issuing a check with insufficient funds. However, it also appears that the employer cured the breach. Therefore, assuming that the second check did not bounce, you can probably sue for breach of contract, but the damages would be limited to the bank fees resulting from the bounced check and the interest on the settlement amount, since the employer cured the breach by issuing an adequate check.

Since a settlement agreement is a contract, any remedy is governed by contract law. Contract law limits most contract remedies to money damages for the losses that the parties could reasonable foresee. Hence, you can recover the bank fees and interest. However, you cannot recover money damages for the embarrassment or aggravation caused by the breach.

posted by Neil Klingshirn  |  Jan 15, 2010 09:22 AM [EST]

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