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Negotiation Considerations

On Behalf of | Oct 6, 2022 | Business Transactions, Employment Law

Many workers find their jobs involve some level of negotiating agreements either 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. This may, especially for a new offering, require research on what industry competitors are setting as terms for similar products or services. A meeting with the employer to discuss how the company wants to handle the pricing questions would be sensible.

Once the worker understands the parameters of his authority, he should identify the respective leverage each party has in the negotiation. It is good preparation to consider the alternatives to a negotiated agreement and analyze the possible options available to the other party if an agreement is not reached. This can also determine whether 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 that management can make is to forego a potential deal.

Another important factor to consider is negotiation style. One of the biggest mistakes made in negotiating is to begin 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 for movement in an initial proposal, but not such a good idea to go in with such an unreasonable opening position that you risk tainting the relationship before it even begins.

Finally, it is extremely important to remember that a judge will enforce 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 and is never enforced. You should proceed with the attitude that, if the other party is unwilling to remove a provision from the 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 they 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].