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Many Things To Consider When Negotiating / Tips on Negotiation

On Behalf of | Feb 24, 2015 | Business Transactions

Many workers find that their jobs involve some level of negotiating agreements with vendors, customers, or others. Prior to entering into such negotiations, it is important for the worker to analyze the negotiation parameters.

The worker must first understand his level of authority in negotiating on behalf of his employer. If the transaction is for a product or service about which the employer has little or no experience, the worker’s input after researching the topic (including information, for example, on what industry competitors are negotiating as terms for similar products or services) will be appreciated by the employer.

Once the worker understands the parameters of his authority, he should consider the alternatives to a negotiated agreement with the other party and analyze or anticipate the possible alternatives available to the other party if it does not negotiate an agreement. Thinking this through helps identify the respective leverage of each party in the negotiation.

It also helps determine whether or not walking away from a potential deal is an acceptable alternative. It is important to remember that all negotiations need not result in an agreement and sometimes the best decision management can make is to forego a potential deal.

Another important factor is negotiation style. One of the biggest mistakes made in negotiating is beginning with an unreasonable position in the hopes of ultimately settling on a less unreasonable deal. Such tactics often result in the souring of a potential business relationship. It is a good idea to always leave some room in an initial proposal for movement, but not so much as to risk tainting the relationship before it even begins.

Finally, it is extremely important to remember that a judge enforces the written agreement based on its express terms. It would be a mistake to commit to a written provision that is unacceptable to you in reliance on the other party’s statement that it is their form provision that is never enforced.

You should be aware if the other party is unwilling to remove a provision from its agreement, they plan to enforce it. It is important that any agreement, however basic, has clear provisions in plain English so that if a problem arises, a judge can read the written provisions and understand what both sides’ respective rights and obligations are without having to rely on testimony from either party.

Such clarity in the agreement will not only help your company’s position should a dispute arise, but it also decreases the chance of a dispute since both parties can look at a written agreement (after their respective memories of the specifics of the deal fail) and review the provisions to which the actually agreed.

J. Daniel Marr is a Director and Shareholder at Hamblett & Kerrigan, P.A. His legal practice includes counseling businesses and individuals on a variety of legal issues and advocating on their behalf. Attorney Marr is licensed and practices in both New Hampshire and Massachusetts. Attorney Marr can be reached at [email protected].