The Federal Court recently issued a decision in the case of Aria Vent Inc. v. 2213785 Ontario Inc. and TRM Holdings Inc., 2025 FC 672 that reinforces the importance of carefully handling settlement negotiations.

After the breakdown of settlement negotiations, the defendants sought an order from the Federal Court to enforce a settlement agreement between the parties based on the settlement negotiations.

The Federal Court found that despite the defendants’ having attempted to pay the agreed settlement amount, the defendants’ failed to “unequivocally” accept other non-monetary essential terms of the settlement.

This case should serve as a reminder to litigants that the Federal Court can declare that a settlement has been reached in the absence of an executed settlement agreement, but that the Federal Court will only do so when acceptance of all essential terms of the settlement agreement can been demonstrated.

Click here to read the full decision.