Other Transactions: Importance of the Vision Statement

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A “vision statement” is a narrative that memorializes the mutual goals of a project. It might be viewed as similar to the preliminary recitals that were once common in contracts. What is particularly important is the discussion that precedes crafting the mutual vision of the project and putting it to writing. The purpose of the discussion is to assure that the goals of the parties (whether bilateral or multi-lateral) are at least congruent, if not identical. If fundamental disconnects are discovered in the preliminary discussion, there is no reason to waste time negotiating detailed terms and conditions – the project is a non-starter.

In addition to discovering show-stopping disconnects, the discussion preceding the writing of the vision statement outlines the important issues that can effectuate or frustrate the parties reaching their goals. This includes the intent of the parties with respect to subjects such as exploring new technology, production, commercialization, and fielding and supporting the results of the project. It begins with the exploration of critical issues such as allocation of intellectual property rights, timing of key events, resources, or capabilities the parties will bring to the project.

The vision statement becomes the key document in the negotiating history of the project. It is a statement of the intent of the parties and aids in the future interpretation of the agreement. It guides the parties as an outline of the content of specific terms and conditions to be included in the project agreement. For example, one party may offer a canned, pre-written position on intellectual property rights that is inconsistent with project goals as memorialized in the vision statement. This will lead to a discussion of whether goals previously agreed, or the detailed terms of the proffered language represent the fully thought-out position of the party. The party offering the inconsistent language will need to review its position and explain the inconsistency in detail.

A vision statement need not necessarily be a lengthy document so long as it captures the key elements of the preliminary discussion. It should serve the purposes outlined above. Negotiators need to keep in mind the parties are in the project to accomplish mutually supporting goals and the agreement is aimed at a win/win result with a minimum of administrative burden and bureaucracy.

The vision statement is usually incorporated into the agreement. It is typically the first clause titled Scope of the Agreement or something similar. Negotiating the vision statement should set the stage for mutual respect for the interests of the parties throughout subsequent negotiation of terms and conditions and administration of the executed agreement.

written by Richard Dunn

 

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