A US case has reaffirmed that where a settlement offer is made it must be accepted unequivocally and without variance of any sort otherwise it is not an acceptance but a rejection or counteroffer.

A settlement offer and acceptance is a contract formed like any other contract.  Settlement agreements must meet the same requirements as other contracts which includes the fundamental principle that the offeror is the master of their offer and free to set the terms of the offer.  Acceptance must therefore comply with the requirements of the offer.

A motor insurer made an offer to two people who had been injured by their negligent driver.  The injured parties sent a written settlement offer to the insurers containing five material requirements including an affidavit by the driver that there was no other insurance and some formalities regarding the way the offer was to be accepted.  These requirements were not met when the insurer paid the $100 000 settlement amount.  The injured parties refused the payment and the court would not hold them to their settlement because the insurer’s acceptance was not in accordance with the offer.

The same result would occur under South African law.

Robert Ligon v Li Na Hu Case No. A21A1296 Court of Appeals of Georgia