The Art of Negotiation
In many lines of business negotiations are an everyday occurrence. Sometimes deals are struck quickly without much deliberation and other times it takes many back-and-forth's to find just the right accord. Once the deliberating parties agree, generally terms are recorded in writing and signatures appended. It's imperative to keep a cool head, remain focused and leave emotion at the door. It's a process that involves give and take and usually one or both parties compromise.
Moving Forward and Performing With Great Expectation
Once a deal has been struck, terms have been recorded in writing and signatures appended, parties begin to perform according to the terms of the agreement. Time lines and specific actions are detailed. Often, as actions or terms are met, addendum are signed by both parties. Expectations on both sides are realistic as set forth in the written and signed agreement.
Defaults and Enforceability
While expectations may be realistic and terms may be clear, sometimes things don't work out. So, what happens if one party defaults on the terms and is unable to perform? How is the agreement enforceable? The answer will vary according to the terms of the agreement, but "any agreement where parties have necessary capacity to contract and the contract was not trifling, indeterminate, impossible or illegal. Remedies can be provided."
Lawmakers rip Fed's 'bait-and-switch'
I came across an article in the Washington Times from this past Friday. (hat tip Delusional Duck)
Here's the opening two paragraphs:
Angry lawmakers Friday accused the Treasury Department of pulling a "bait-and-switch" as it implements the $700 billion Wall Street rescue plan approved by Congress last month.
Treasury Secretary Henry A. Paulson Jr. earlier this week confirmed that the bailout funds would be used primarily to re-capitalize banks and other financial firms through direct stock purchases, not to purchase "toxic" mortgage and other assets from lenders as the Bush administration originally intended.
An Obvious Disconnect
There's obviously a disconnect between the lawmakers and the Treasury Department. But, that's not what bothered me. What bothered me was the lawmakers inability to implement and execute an agreement according to their expectations.
The lawmakers expected the bailout funds to be used to "buy toxic mortgages and other assets from lenders". Instead the bailout funds are primarily being used "to re-capitalize banks and other financial firms through direct stock purchases".
Politics aside or whether you agreed with Government intervention or not, there is a lesson to be learned from this.
The Lesson?
While I am not an attorney and I am not offering legal advice I do suggest the lesson here is:
- Get the agreement in writing
- Understand what is written
- Make sure what is written is enforceable
- Expectations are realistic and are based on what is written
- Assume nothing
- And when needed seek competent legal counsel
It's My Business
I'm a Realtor and my business is listing and selling houses. I don't know the intricacies of lawmaking, but I am familiar with contracts to list and sell Real Property. That's a large part of my job. I visualize my contract as my tool box. I do know what's in my tool box, how to use those tools and I also know my limitations with each tool.
What's This All About
We're in tough times, times I've never seen before. Some say this is the worst Global Economy in 20 years, others compare this to the Great Depression. But, while relevant, that's not my point.
Lawmakers are well-educated and many of them have been in Congress for some time. They have experiences far greater than many of us, so I don't think it's a question of ability. Call me the eternal optimist, but I also don't think it was malicious or self-serving. I do believe, collectively, their intent was good and meant to bring positive change.
Because of the magnitude of the crisis and in their haste to devise a solution, I think lawmakers lost focus of the art of negotiation and made decisions based more on emotion than logic.
What say you?
