Rucker v. Rucker

A substituted contract must show the intent of the parties to substitute the new promise for the original liability. Recording the agreement in court and signing a memorialization is sufficient to show such intent.

Plaintiff sued defendants to recover damages arising from the nonpayment of a promissory note. Defendants argued that the promissory note was extinguished and replaced by a settlement agreement reached via mediation. The trial court agreed with defendants. Plaintiff appealed, arguing that the trail court erred in finding that the settlement agreement replaced the promissory note because the parties did not intend the settlement to be a final agreement and therefore the settlement agreement was an 'executory accord.' The Court of Appeals outlined that for a substituted contract to be formed, the "intent to substitute the new promise for the original liability must be clearly shown." The Court held that there was an intention to replace the promissory note with the settlement agreement because the parties involved had the agreement recorded in court and stated their intentions to abide by it. Additionally, a memorialization of the agreement was written which stated that the parties had "reached a settlement and resolution of all claims," which the plaintiff signed. Affirmed on appeal.