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Discussion
A controversy before this Court may be settled by agreement
of the parties. Dorchester Indus. Inc. v. Commissioner, 108 T.C.
320, 329 (1997), affd. without published opinion 208 F.3d 205 (3d
Cir. 2000). A settlement is a contract, and general principles
of contract law apply in interpreting the settlement. Id. at 330
(citing Robbins Tire & Rubber Co. v. Commissioner, 52 T.C. 420,
435-436, supplemented by 53 T.C. 275 (1969)). A settlement may
be reflected in a formal written agreement or more informally,
such as in an offer and acceptance made by an exchange of
letters. Id. (citing Lamborn v. Commissioner, T.C. Memo. 1994-
515). Written settlement agreements are enforced as binding
agreements. Id. (citing Haiduk v. Commissioner, T.C. Memo. 1990-
506).
Ordinarily, once a settlement has been reached, it cannot be
repudiated by either party. Id. However, we may relieve a party
of an otherwise binding settlement agreement if the party can
show a lack of formal consent, fraud, mutual mistake, or other
similar ground. Id. at 335; Revell v. Commissioner, T.C. Memo.
2007-37; see also Stamm Intl. Corp. v. Commissioner, 90 T.C. 315,
321-322 (1988).
Both parties signed the stipulation in this case creating an
enforceable, binding settlement agreement between them. Counsel
for respondent notified the Court on the day of trial that a
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