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In our two prior articles (The expanded role of courts in settling government investigations and Settlements with the government), we addressed issues that arise after a settlement agreement has been signed by the parties to a dispute: getting the agreement approved by a court, especially in a government enforcement action; and, after the agreement has been approved, modifying or undoing the settlement following significant changes in the facts or law. In this article we discuss an issue that arises just before a settlement agreement is executed – namely, what happens when the parties agree to settle in principle but one party changes his or her mind before the agreement is fully executed?

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