How You Can Avoid Faulty Negotiated Agreements

Once you have a negotiated agreement, the proof of the pudding is in the details of the agreement.  Both parties need to be on alert to any concerns offered by legal reviews of the final agreement.  In this article from the Program on Negotiation from the Harvard Law School blog the staff raise a number of important concerns.  I would like to offer some additional insights beyond the article for your consideration.  I need to also indicate that I am not an attorney and the example presented below is simply an example based on observed experiences as a mediator.

The article provides commentary of what might be perceived as necessary by you or the other party having reached an agreement and what your legal staff or your attorney might deem as necessary to finalize an agreement.  Keep in mind the attorney works for you and you as a party have the final decision relative to the mediated agreement.

The mediated agreement should clearly articulate who, what, when, where, why and how the results of the mediated agreement will proceed going forward.  When an attempt is made to document this for legal reasons, my experience indicates that representatives of both mediation teams need to continue to be actively involved to ensure the understanding and acceptance by the parties.

This is a simplified hypothetical example relating to a payment plan by one party to another party for a mediated agreement of a commercial landlord tenant issue completed on June 16, 2016. The amount of overdue rent is 57,000 (3 months X $19,000 a month).  A payment plan has been agreed to by the parties for six months at $9,500 ($57,000) beginning in July and running through December.

“Payments of $9,500 will be made on the third Tuesday of every month for six months beginning July 19, 2016 and continue through December 20, 2016.  In addition, current rent in the amount of $19,000 per month will be paid by the fifth working day of each month through January 5, 2017.  Payments will be made by a certified check.  The check will be made to “Some Firm” or to a “specific name of an individual”.  Payment will be made by 4:30 pm on the day due and be delivered to a specific street address, suite number, some city, some state, appropriate zip code. “

The following table was agreed to as an attachment to the agreement.

Both parties feel very good about this agreement and are ready to move on.   The attorneys sitting around the table or reviewing this later may offer some suggestions, and as a result additional commentary may be added.  For example:

“If the parties fail to abide by the terms of this agreement then a writ of recovery will issue.” This means if the payments are not paid as indicated in this agreement then the landlord could proceed to the clerk of the court to have the county sheriff evict the tenant within two days.   It is very important that everyone understands this before signing the agreement.

“If all of the payments are made as indicated in this agreement then the landlord will petition the court to have the unlawful detainer removed from the record of the tenant within 14 days of having received the last payment from the tenant.”  This will allow the tenant to have the unlawful detainer expunged from his or her record that otherwise may have been negatively impacted the credit rating of the tenant or the ability to rent in the future.

The two add on commentaries presented here may be acceptable to both parties, but clearly both parties need to understand and be willing to accept the ideas presented by the attorneys for the two parties.  These two add on commentaries are important clarifications, and demonstrate concerns not initially thought of by the parties. 

After a mediated agreement has been agreed to by the parties, it is important that any legal review include the mediation participants with decision making ability to consider the ideas offered by attorneys and the spirit of the agreement agreed to by the parties.   These thoughts may indeed add value or can work to undermine the mediated agreement.  It is very important that the spirit of the mediated agreement be considered and any legal recommendations offered by the attorneys of the parties involved with the final legal agreement.

Michael Gregory, ASA, CVA, MBA is an expert in conflict resolution dedicated to making thought-leading entrepreneurs and executives more successful. Michael’s books, The Servant Manager: 203 tips from the best places to work in America and his NEW BOOK Peaceful Resolutions: A 60-step illustrated guide to conflict resolution are available at http://mikegreg.com/books.   Free resources are available online at www.mikegreg.com. Check out the blog.  Contact Mike directly at mg@mikegreg.com or call (651) 633-5311.