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Simple English definitions for legal terms
Gallagher agreement
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A quick definition of Gallagher agreement:
Term: Gallagher Agreement
Definition: A Gallagher agreement is a type of contract between two defendants in a lawsuit. This agreement allows one defendant to settle with the plaintiff for a fixed amount of money at any time during the trial. Even if the trial continues, the defendant who settled will still have to pay the agreed amount. This is different from a Mary Carter agreement, which allows a defendant to pay less if they win the case.
A more thorough explanation:
Definition: A Gallagher agreement is a type of contract that allows one defendant to settle with the plaintiff for a fixed amount of money at any point during a trial. This agreement guarantees payment of the settlement amount, regardless of the outcome of the trial. It is named after the case City of Tucson v. Gallagher, which established this type of agreement.
Example: Imagine that there are two defendants in a lawsuit. They both agree to a Gallagher agreement, which states that one defendant can settle with the plaintiff for $50,000 at any point during the trial. If this happens, the other defendant is still responsible for paying their share of the settlement amount, even if they are found not liable in the trial.
This example illustrates how a Gallagher agreement can be used to shift the risk of a trial outcome onto one defendant, while still ensuring that the plaintiff receives a guaranteed settlement amount.