If you are about to participate in a mediation that you expect to result in an agreement but are concerned about the possibility that the other party may not fulfill all its promises, here are some helpful tips.
- Some agreements provide for immediate fulfillment of all terms and are immediately completed. These agreements are not a cause for concern.
- However, many agreements do provide for some terms to be fulfilled based on an agreed schedule. Here there is significant risk.
- Should future performance strictly involve payment of funds, you could consider a default provision that charges late interest on overdue funds at an agreed rate and ask for collateral security which can be registered against the buyer’s assets. Such security would stay in place as long as the funds remain unpaid.
- Should the outstanding terms involve non-monetary steps to be taken in the future, you might consider asking for a price adjustment clause that sets the dollar value of any outstanding steps requiring the buyer’s action, or at least an agreed formula to calculate this value.
- Generally speaking, our courts don’t supervise or enforce ‘personal services’. So a dollar value price reduction provision is the better away to go to secure compliance.