Michigan’s Court of Appeals decided this week that a mediation agreement was too vague to be enforceable.

It’s not unusual for a mediation to end with a hand-written document that contemplates another document to finally settle the dispute. In fact, it’s fairly common for the mediation of a litigated case, where parties are represented by attorneys, to end with a “memorandum of understanding” outlining the basic agreement and what needs to be done to settle the case and dismiss the lawsuit.

In Control Room Technologies v Waypoint Fiber Network, the mediation of a business dispute ended with a three-page handwritten agreement that began by noting that the parties agreed “in principle to the following, subject to execution of a definitive agreement by the parties.” The agreement went on to describe various aspects of the parties’ contractual relationship going forward, but several items were left “to be determined.” It stated that the parties’ lawsuit would be dismissed “upon execution of [a] definitive agreement.”

A majority of the three-judge panel in the Court of Appeals found this too vague to constitute an enforceable agreement. “To be enforceable, a contract to enter into a future contract must specify all its material and essential terms and leave none to be agreed upon as the result of future negotiations.”

Nonsense, said the dissenting judge, Peter O’Connell. The agreement identifies the parties, the property, and the consideration. All that’s left “to be determined” is the period of time, and courts have traditionally supplied such omissions with a “reasonable” time.

While this is an unpublished case, so binding only on the parties, it gives all mediation participants guidance on mediation agreements. During the tedious agreement-drafting phase at the end of mediation, everyone is tempted to put just the bare minimum in the agreement, and leave the details for another day. This case reminds us that the agreement, to be enforceable, needs to specify the essential elements of a contract, and not leave much “to be determined” at a later, unspecified date.

In my experience, the document these parties drafted at the end of their mediation is not a typical mediation agreement. Usually the missing details pertain to “boilerplate” items like release language. Usually even the hand-written agreement doesn’t say it’s “subject” to “a definitive agreement.” Instead, it typically starts with language to the effect that “the parties have reached the following agreement” and includes how to determine the missing details. Apparently this agreement didn’t say when or how the missing items would be “determined.”

I think as a mediator I might have raised the question here whether these parties intended this document to be enforceable. Maybe this mediator did—and maybe the fact that it doesn’t say anything about its enforceability is a clue that the parties didn’t quite feel like they were there yet. Based on this opinion, we now know that, if parties intend their “in principle” agreement to be enforceable, it needs to contain essential terms and cannot provide for them to be figured out later.

So I think I agree with the majority that this agreement wasn’t enforceable.

Jon March is a seasoned litigator with the Miller Johnson law firm in Grand Rapids, who has built a successful practice as a mediator. He published at article in the ADR Section January 2015 newsletter entitled, “My Ten Biggest Mistakes as a Mediator,” and he’s given presentations on this topic; I heard one yesterday at the Dispute Resolution Center of West Michigan.

Many mediators can relate to the mistakes Jon mentions. We’ve all had moments when we’ve said something that betrayed our neutrality; we’ve seen potential agreements fall apart because we failed to appreciate that a person of influence wasn’t present in the room; and we’ve all faced the dilemma where at least one party doesn’t want to stick around to sign the written agreement ending the mediation. It’s somehow comforting to know that mediators as experienced and successful as Jon March have similar regrets. No doubt Jon has done so well because he learned from each mistake, and now we learn from him.

The one “mistake” that I think could be turned into a positive concerns the joint session. Jon describes a mediation where plaintiff’s attorney really wanted a chance to address opposing counsel at the start of the mediation; against his better judgment, Jon agreed to let this happen. As Jon feared, opposing counsel used the opportunity to rip the plaintiff to shreds, souring the settlement potential. Jon’s conclusion is that opening statements by lawyers are fraught with danger, and should be permitted only under special circumstances, if at all.

Rather than omit them, a better way to avoid the dangers of lawyers’ opening statements is to prepare the lawyers beforehand. Get them to think about their goals, their audience, their opportunities. While there are risks, I’ve seen lawyers’ openings set the stage for a productive mediation, because each client gets to evaluate opposing counsel and the strength of their argument. If there’s been no discovery, this may be the client’s first chance to size up opposing counsel. It’s an opportunity to hear and clarify differences in facts and law. And it’s also a chance for each client to gain confidence and trust in their own lawyer. Even if there is no discussion after the lawyer’s openings, and the parties proceed to caucus, the mediator has much more to work with than if the parties never heard the other lawyers’ opening statements.

I admire Jon for making his mistakes so public. And I thank him for helping us all learn from his mistakes.