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endings, we must decide whether there was a settlement, and if
so, what was settled; i.e., the cash contribution issue or the
entire case.
The general principles involving settlements have been
effectively set out in the case of Dorchester Indus., Inc. v.
Commissioner, 108 T.C. 320, 330 (1997) (quoting Manko v.
Commissioner, T.C. Memo. 1995-10), affd. without published
opinion 208 F.3d 205 (3d Cir. 2000), as follows:
“For almost a century, it has been settled that
voluntary settlement of civil controversies is in high
judicial favor. Williams v. First Natl. Bank, 216 U.S.
582, 595 (1910); St. Louis Mining & Milling Co. v.
Montana Mining Co., 171 U.S. 650, 656 (1898). A valid
settlement, once reached, cannot be repudiated by
either party, and after the parties have entered into a
binding settlement agreement, the actual merits of the
settled controversy are without consequence. This
Court has declined to set aside a settlement duly
executed by the parties and filed with the Court in the
absence of fraud or mutual mistake. Stamm Intl. Corp.
v. Commissioner, 90 T.C. 315 (1988); Spector v.
Commissioner, 42 T.C. 110 (1964). However, a court
will not force a settlement on parties where no
settlement was intended. Autera v. Robinson, 419 F.2d
1197 (D.C. Cir. 1969).
“A settlement is a contract and, consequently,
general principles of contract law determine whether a
settlement has been reached. Robbins Tire & Rubber Co.
v. Commissioner, 52 T.C. 420, 435-436, supplemented by
53 T.C. 275 (1969). A prerequisite to the formation of
a contract is an objective manifestation of mutual
assent to its essential terms. Heil v. Commissioner,
T.C. Memo. 1994-417; 17A Am. Jur. 2d, Contracts, secs.
27 and 28 (1991); 1 Williston on Contracts, sec. 3:5
(4th ed. 1990). Mutual assent generally requires an
offer and an acceptance. 17A Am. Jur. 2d, Contracts,
sec. 41 (1991). ‘An offer is the manifestation of
willingness to enter into a bargain, so made as to
justify another person in understanding that his assent
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