- 6 -
binding in the absence of fraud, misrepresentation, or mutual
mistake of fact. Spector v. Commissioner, 42 T.C. 110, 113
(1964); Saigh v. Commissioner, 26 T.C. 171, 177, 180 (1956). In
describing a settlement agreement we have stated that:
A settlement [agreement] is usually a compromise, and the
mere fact that [one of the parties] now feels more confident
about some point or points that he did not insist upon in
first determining and later stipulating these particular
deficiencies is not sufficient grounds for avoiding the
settlement agreement. * * * [A] settlement stipulation is in
all essential characteristics a mutual contract by which
each party grants to the other a concession of some rights
as a consideration for those secured and the settlement
stipulation is entitled to all the sanctity of any other
contract. * * * [Saigh v. Commissioner, supra at 177;
citations omitted.]
When an agreement is ambiguous, however, we may look to
extrinsic evidence to determine the parties’ intentions. Woods
v. Commissioner, 92 T.C. 776 (1989). In Constitution Pub. Co. v.
Commissioner, 22 B.T.A. 426, 428 (1931), the Board defined
ambiguity and set forth the applicable law concerning ambiguous
contracts as follows:
if the expression used and the language of the instrument is
merely ambiguous, the rules of construction with respect to
doubtful or ambiguous contracts or documents are applicable
here. Upon this ground we have the right and it is our duty
to determine what * * * the parties intended by the
expression used. An instrument is clearly ambiguous and is
open to construction when its words, taken literally, lead
to absurdity or have no meaning or when two meanings could
be given. * * * It is a primary rule of construction of
documents that the Court must if possible ascertain and give
effect to the mutual intention of the parties and in doing
this greater regard is to be had to the clear intent of the
parties than to any particular words which they may have
used in the expression of their intent. * * * [Citations
omitted.]
Page: Previous 1 2 3 4 5 6 7 8 9 Next
Last modified: May 25, 2011