Control Room Technologies v Waypoint Fiber Network<\/a>,<\/em> the mediation of a business dispute ended with a three-page handwritten agreement that began by noting that the parties agreed \u201cin principle to the following, subject to execution of a definitive agreement by the parties.\u201d The agreement went on to describe various aspects of the parties\u2019 contractual relationship going forward, but several items were left \u201cto be determined.\u201d It stated that the parties\u2019 lawsuit would be dismissed \u201cupon execution of [a] definitive agreement.\u201d<\/p>\nA majority of the three-judge panel in the Court of Appeals found this too vague to constitute an enforceable agreement. \u201cTo 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.\u201d<\/p>\n
Nonsense, said the dissenting judge, Peter O\u2019Connell. The agreement identifies the parties, the property, and the consideration. All that\u2019s left \u201cto be determined\u201d is the period of time, and courts have traditionally supplied such omissions with a \u201creasonable\u201d time.<\/p>\n
While this is an unpublished case, so binding only on the parties, it gives all mediation participants guidance on mediation agreements.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 \u201cto be determined\u201d at a later, unspecified date.<\/p>\n
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 \u201cboilerplate\u201d items like release language. Usually even the hand-written agreement doesn\u2019t say it\u2019s \u201csubject\u201d to \u201ca definitive agreement.\u201d Instead, it typically starts with language to the effect that \u201cthe parties have reached the following agreement\u201d and includes how to determine the missing details. Apparently this agreement didn\u2019t say when or how the missing items would be \u201cdetermined.\u201d<\/p>\n
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\u2014and maybe the fact that it doesn\u2019t say anything about its enforceability is a clue that the parties didn\u2019t quite feel like they were there yet. Based on this opinion, we now know that, if parties intend their \u201cin principle\u201d agreement to be enforceable, it needs to contain essential terms and cannot provide for them to be figured out later.<\/p>\n
So I think I agree with the majority that this agreement wasn\u2019t enforceable.<\/p>\n","protected":false},"excerpt":{"rendered":"
Michigan\u2019s Court of Appeals decided this week that a mediation agreement was too vague to be enforceable. It\u2019s not unusual for a mediation to end with a hand-written document that contemplates another document to finally settle the dispute. In fact, it\u2019s fairly common for the mediation of a litigated case, where parties are represented by […]<\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[],"class_list":["post-318","post","type-post","status-publish","format-standard","hentry","category-learnings-from-mediation"],"_links":{"self":[{"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/posts\/318","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/comments?post=318"}],"version-history":[{"count":1,"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/posts\/318\/revisions"}],"predecessor-version":[{"id":319,"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/posts\/318\/revisions\/319"}],"wp:attachment":[{"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/media?parent=318"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/categories?post=318"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/abfifer.com\/blog\/wp-json\/wp\/v2\/tags?post=318"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}