What is a Stipulated Agreement?

By Chris Blank

In legal matters, there are often issues that require lengthy and acrimonious procedures, but this is not always the case. In many instances, it is possible for parties to come to what is known as a stipulated agreement. Stipulated agreements can save both time and money; however, care must be taken that stipulated agreements are truly advantageous for both parties.

Stipulated Agreements Defined

In law, a stipulated agreement is simply a meeting of the minds on a particular issue. Both parties agree, or stipulate, that there is no dispute concerning the specific matter involved. The stipulated agreement spells out the terms of the issue at hand, as well as stating the agreement of both parties. A stipulated agreement may cover an entire legal issue, or only a portion of the legal issue, leaving the balance to be determined by negotiation or in court.

Origins of Stipulated Agreements

Stipulated agreements originated in the laws of ancient Rome. In Roman law, the individual for whom a promise or contract was being offered posed a question to the person expected to fulfill the contract or promise, expecting that person to respond affirmatively. Both parties were required to speak, and there should be no hesitation between question and response. This was designed as a public affirmation of agreement between two parties.

Substantive Stipulated Agreements

Substantive stipulated agreements are agreements of the content or essential nature of the matter at hand. A common example of a substantive stipulated agreement is a marital separation agreement to divide the property of spouses during the process of obtaining a divorce. In a substantive stipulated agreement, the details left to be worked out are procedural or determining how to carry out the terms of the agreement.

Procedural Stipulated Agreements

Procedural stipulated agreements do not address the substantive issues at hand. One example of a procedural stipulated agreement is an agreement to negotiate through a mediator or binding arbitration. While procedural stipulated agreements can save time and money, they do not actually resolve the actual differences or disagreements between the two parties.

Stipulated Insurance

Stipulated insurance is a special form of stipulated agreement. Under normal insurance policies, a policy holder pays a set premium and is insured against loss, even if the loss exceeds the amount of accumulated paid premiums. With stipulated insurance, the insurance issuer imposes a penalty and higher premiums when it faces an unusually large loss. The policy holder agrees to the penalty and increased premiums as a means of retaining the insurance policy.

Read More: What Is a Stipulated Divorce Hearing?