iWTNS, Inc., et al. v. MotionMobs, LLC, [Ms. SC-2024-0591, Aug. 22, 2025] __ So. 3d __ (Ala. 2025). The Court (McCool, J.; Stewart, C.J., and Shaw, Bryan, and Mendheim, JJ., concur) reverses the Jefferson Circuit Court’s judgment enforcing a settlement agreement.
In the course of litigation involving a contract to create a mobile-phone application, Bradley Lewis exchanged text messages with the CEO of MotionMobs, LLC to discuss a possible settlement. Ms. *2. The Circuit Court granted MotionMobs’s motion to enforce a settlement agreement allegedly reached in the text-message exchange.
In reversing, the Court first explains
Under the law, a settlement agreement is simply a contract. Sheridan v. Board of Water & Sewer Comm’rs of Prichard, 764 So. 2d 526, 529 (Ala. 1999). To be valid, a contract requires an offer, acceptance of the offer, and adequate consideration. Cook’s Pest Control, Inc. v. Rebar, 852 So. 2d 730, 737 (Ala. 2002). For contracts for services, an acceptance must be “identical” to the offer to be effective. Smith v. Chickamauga Cedar Co., 263 Ala. 245, 249, 82 So. 2d 200, 203 (1955) (citation omitted). Thus, if a party responds to the offer with additional or changed terms, that is a counteroffer that implicitly rejects – and thus terminates – the original offer. Cook’s Pest Control, 852 So. 2d at 737; Payne v. Zimmern, 207 Ala. 155, 158, 92 So. 433, 435 (1921) (“There is abundant authority for the proposition that a conditional acceptance which amounts to a counter offer operates as a rejection of the original offer.”).
Ms. *8. The Court holds “parties cannot agree to empty clauses with details to be filled in later… Because Lewis did not (and could not) accept Fisher’s indefinite counteroffer, MotionMobs and the defendants have not yet agreed to settle.” Ms. **12-13.