“A helpful and succinct statement of the law regarding the enforcements of settlement agreements is found in Zaidi v. Syed (Estate), 2023 ONSC 1244, at para. 13, aff’d 2024 ONCA 406, a case involving a settlement agreement parties reached in connection with an estates dispute:
[12] The law associated with the enforcement of settlement agreements, which is an aspect of the well-settled law of contract, is also well settled…
[13] A settlement agreement is a contract, and the court has jurisdiction at common law and under rule 49.09 to enforce settlements. A motion to enforce a settlement involves two elements. The first element is whether or not there is any genuine issue about the existence of an agreement to settle, and the second is to determine whether there is any reason not to enforce the settlement.
[14] For there to be a binding settlement agreement, there must be a mutual intention to create a legally binding agreement and the essential terms of the agreement must have been agreed upon. However, it is not necessary to have reached agreement on incidental matters, such as the method of payment or the exchange of releases.
[15] There is a strong presumption in favour of the finality of settlements; however, a settlement agreement is a contract and is subject to the law of contract formation, and a settlement agreement can be set aside in the same way that a contract may be rescinded for mistake, fraud, innocent misrepresentation, duress, undue influence, or unconscionability. [Emphasis added, footnotes omitted.]
I should add here that in family cases, settlements can also be set aside under s. 56(4) of the Family Law Act.”