It sounds like a silly question. But it does matter that parties actually have agreed on the offer and acceptance elements that make up any settlement. This was the core issue in a recent full bench Fair Work Commission decision which found that there was, in fact, no agreement at all. 

The case started as a result of failed conciliation proceedings, where the employee argued that the final settlement offer was not what he had agreed to.  

At first instance, the single member of the FWC decided that on balance, the parties had reached a settlement on the “essential terms” and dismissed the claim. 

On appeal, the full bench made the point that when it came time to reduce the agreed terms to writing, some new elements appeared that the employee had not accepted.  The bench indicated these terms were not to the employee’s benefit and they had deviated from what the employee had offered in the negotiations.  

The correspondence between the parties at this late stage also was subject to client confirmation. 

The rule here is that “a contract must be clear and complete, at least in the essentials”. There is no problem with minor machinery or ancillary issues being tidied up later.  But while the essentials were in place, the ‘new’ elements were not merely administrative or inessential. The full bench found they went beyond that. 

The employer argued the issues in dispute had all been canvassed, and that was true. But on examination of the material it was clear the various scenarios and propositions had been aired over the conciliation process, as in any negotiation. However in the horse-trading that went on, again, as in any deal-making, some of these fell away.  It was the addition of these back into the mix that caused the trouble. 

The bench stressed the importance of the principles surrounding the making of contracts (or settlements). It said “the questions remain whether there is an offer and acceptance which precisely correspond and whether the communications between the parties and their conduct expressed, objectively, an intention to make a concluded bargain.” 

This case reminds us of the importance of focussing on the essentials and then when they are agreed, not to try to squeeze a bit more out of the deal. These parties were very close before it all fell apart. While opinion will differ on the true value of the extras that were brought in late, any such benefit has to be balanced against certainty and finality.  It’s got to be better to get an acceptable outcome than lose the lot pushing for the ideal. 

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