Avoidance
Definition
In legal terms, avoidance refers to the cancellation or nullification of a contract, agreement, or other legal document. An avoided contract is treated as if it never existed. Avoidance can occur when a contract was entered into through fraud, misrepresentation, mistake, duress, or lack of capacity. The concept also applies to voiding releases or settlements obtained improperly.
How It’s Used in Personal Injury Cases
Avoidance becomes relevant when an injured person signs a release or settlement agreement that they later wish to void. Common grounds for avoiding a settlement include fraud or misrepresentation by the insurance company, lack of understanding due to medications or mental state, signing under duress, or mutual mistake about the nature or extent of injuries. Successfully avoiding a release allows the injured person to pursue their claim as if no settlement had occurred.
Practical Example
Three days after her accident, while still in the hospital on pain medication, Sandra signed a release form from the at-fault driver’s insurance company for $5,000. She later discovered she had a herniated disc requiring $50,000 in surgery. Her attorney sought avoidance of the release, arguing she lacked capacity to understand the agreement while on medication and that the insurance company misrepresented that her injuries were minor. The court voided the release, allowing Sandra to pursue her full claim.
Why It Matters to Your Case
If you signed a release or settlement you now regret, avoidance may provide a path forward. Insurance companies sometimes obtain quick settlements from injured people who don’t yet know the full extent of their injuries. However, avoiding a settlement is difficult and requires proving specific legal grounds. Never sign any documents from insurance companies without consulting an attorney first.
Key Takeaway
Avoidance may void a settlement obtained through fraud or when you lacked capacity to understand it—but avoiding a release is difficult, so never sign insurance documents without legal advice.