When is a Deal not a Deal?
I was recently in a mediation where the parties settled a legal action and signed a handwritten agreement covering all of the aspects of the agreement. There was nothing in the agreement that said the parties could or should transfer the deal points into a more formal agreement. (i.e. not handwritten.)
The next day the counsel representing the other side call to say we needed to draft and sign a "more formal," agreement. I said "No," the agreement is fine as we signed it. There were no missing deal points, and the agreement was complete in all respects.
The opposing party insisted on drafting a agreement that covered all of the deal point correctly, and then added some language. We finally signed a new agreement after I had removed anything in the new agreement that even remotely created a burden on my client that was not covered in the first agreement. Fortunately, in my situation, the other counsel was not trying to re-negotiate the deal, so the process went smoothly. But it was an unnecessary process. It added nothing to the settlement, and the clients received no additional benefit.
Why do attorneys insist on re-writing hand written agreements? I personally think it is a waste of time and effort. If some important point was left out of the agreement, and your client wants to continue negotiating, that is about the only circumstance where continuing the process makes sense. But the risk of the deal or settlement falling apart goes up significantly. Every attorney knows that if the parties reach a settlement, but do not set the agreement down in writing and sign it, once the parties leave the deal is at high risk of falling apart. Rewriting an agreement that is already written can result in disputes, or the renegotiation falls apart and the parties are back to their handwritten agreement that they originally intended to be the final expression of their agreement. And what is gained by rewriting and amending the agreement? It is not likely that the other party will suddenly agree to additional material terms?
Parties can litigate the duties and obligations of a hand written agreement just as much as a, "more formal" agreement. If an agreement is complete, and there are no additional material terms to be negotiated, parties should leave them alone.
On the other side of this are the agreements that, by their terms, are not complete and the parties agree to continue working out terms. These are not contracts - but more like agreements to maybe agree in the future.
