Negotiations could be long, drawn-out affairs. When the last agreements are already reached, each of the negotiation styles and negotiating techniques are put away, and everyone stacks up, shakes hands and instead gives off the room, right? No! There is a different important component of the whole negotiation process before you’re done – you should create a memorandum of understanding.

Why Is A Memorandum Of Understanding Needed?

I can’t inform you how many negotiations I’ve seen come unraveled right after both sides from the table seemed to are already able to reach a negotiated agreement. What caused this deal to fall through was one easy thing: time.

When you wrap your negotiation up, you will always don’t have a signed contract. Instead what you could have is a verbal agreement within the major issues. What’s still missing can be a written document that both sides are actually willing to sign.

This creates a problem. As time slips by following agreement is reached above the negotiating table, people’s memory products was accepted (or otherwise!) actually starts to change. All too soon, you will discover that the two parties who belief that they had reached an offer now believe they are still far apart over a number of different issues.

How Do You Use A Memorandum Of Understanding?

This is the place a memorandum of understanding is available in. This is often a document that you just create for the tail end of one’s negotiation so that you can capture the agreement is that continues to be reached depending on how both parties currently find it.

One important point you are going to have to take into account is the simple fact that you just’ll never be capable to capture the many negotiation details as part of your memorandum of understanding – therefore you shouldn’t try and. Instead, what you must focus on is documenting the highlights in the agreement – the key issues.

Let the memorandum of understanding you create document the main issues that were opted for. Taking the time if your negotiation has wrapped up to complete this one last step will find yourself eliminating a lot of future confusion and can ensure how the deal which you’ve reached today gets to be a signed contract tomorrow.

What Does All Of This Mean For You?

The negotiation definition signify that a negotiation can stretch over days, weeks, or perhaps months. When the last agreement may be reached, it may be tempting just to walk away and permit the lawyers draft the final paperwork. Don’t let this happen!

So a number of things were discussed within a principled negotiation that each party of the table must be reminded with the items they accepted before they leave the space. Create a memorandum of knowing that documents what each party think that they opted for.