Do we have a deal part 1: The meeting of minds
Owen Hayford, Partner, and Stuart Connor, Senior Associate, Construction and Major Projects
Owen Hayford
Well I guess you know with negotiations I mean the most difficult issue is trying to reach a true meeting of the minds.
Stuart Connor
Exactly. Both parties put their position broadly speaking they come to an agreement but probably everybody knows in the back of their mind that there's a little bit of room in between them that nobody wants to draw attention too.
Owen Hayford
People want to be non-confrontational they're trying to strike an agreement and they don't want to raise the little "oh yeah but what abouts" in relation to everything the other party might say and so you know it's not uncommon for one party to say something which is as a statement broadly correct and the other party doesn't have an objection to it in a broad sense but there are some issues around the edge where they do take objection but they won't raise that then and there because they don't want to be confrontational. Instead they might raise those points subsequently in the negotiations without the other party even recognising that it actually contradicts the earlier statement.
Stuart Connor
I think that's just normal business from time to time but people do need to understand what that means when they put together an agreement in writing.
This reminds me of a case that I was reading the other day - it was a development case and it had gone horribly wrong. One of the parties was required to put some money in at the end, but of course the development hadn't gone well so they didn't want to do that. When they got to court in front of a judge they tried to refer back to circumstances very similar to what you just described - the parties put their different points of view forward, maybe one party doesn't formally respond to a position they don't like but they slip something in later, and then the contract ends up being what it is. The judge said, look you can tell me about those negotiations, but in these circumstances the words of the contract are quite clear.
Really the whole point of the negotiations is to get to the point where you put down in clear words what the position is between the parties and once you've done that they really take precedence.
Owen Hayford
It's one thing to fudge points during negotiations to keep things moving, but if the point which is being fudged is also fudged in the document, that is, not directly addressed, well then if that becomes an issue down the track there are going to be difficulties in resolving it.
Stuart Connor
As you say, if it's a difficult point you have a better chance of resolving it before it becomes a difficulty.
