In contract law, the question of whether acceptance of an offer is within a reasonable time where no time for acceptance is specified is generally a question of fact for the fact finder given the surrounding circumstances. What is reasonable depends on the need or lack thereof for timely acceptance, what the parties believed to be the time frame for acceptance, and the expiration of the need for the offeree to perform the act required by the offeror.
In the case of a settlement contract, the consideration is generally thought of as forbearance to bring a suit or the forbearance to appeal a less than favorable verdict depending on the party that is making the offer. Once the statute of limitations has run there is no longer a need for the offeree to perform on an offer from the insurance company, because the insurance company no longer needs the offeree to forbear in bringing a suit or release the insurance company of any claims. There is no longer consideration for the contract. Therefore, a settlement contract cannot be formed after the statute of limitations has run.
In Smith and N.C. Farm Bureau v. Murrell and Progressive Insurance, 167 N.C. App. 655 (2004), the court held that Farm Bureau’s acceptance of Progressive’s offer to settle after the statute of limitations had run was not acceptance within a reasonable time because the release included in Progressive’s offer was no longer meaningful.
However, if the offeror mislead the offeree to believe that the offer would remain open past the statute of limitations then the court could find that a contract existed based on an equitable estoppel argument. Simply making an offer to settle and leaving the offer open should not create an equitable estoppel argument because equitable estoppel is based on the giving of misinformation or deceit.
Being as specific as possible about how long the offer to settle is on the table and when and how acceptance is to be made may be the best way to avoid the possibility of a person coming back after the statute of limitations has run and expecting to still be able to accept an offer to settle.