What is Negotiation?Negotiation can be defined as follows:
A Successful contract negotiation means that both sides look for positives that benefit both parties in every area while achieving a fair and equitable deal which is essential for building quality long term relationship between them.
Why Should I Negotiate?
Negotiation is a way of life just like a contract is an everyday occurrence in an individual's life. While many of us do not negotiate everyday on smaller issues, but there are certain contracts which are crucial for us for a long term and therefore need to be negotiated because it saves you money and also makes you realize your true worth. An individual might need to negotiate her salary, or rent or a businessman might have to negotiate the terms of a pending merger etc.
Negotiation is an art and one needs to be prepared before signing on any contract terms. We would discuss the art of Negotiation further in this write up.
Are Non- Negotiable contracts valid?
These days, with the internet transactions making most of our dealings, there are many contracts which are standard and non negotiable. There is yet another class of Contracts called "Click Wrap" contracts which are deemed to be enforced the moment user clicks on OK or I AGREE button. These contracts are usually legally enforceable.
What are the objects of Negotiation?
The objects of Negotiation can be enumerated as follows:
- To explain clearly all essential prerequisites, terms and conditions
- To define Goods or services to be provided
- To clearly state compensation : Total cost, payment schedule, financing terms must be mentioned in the contract
- To acknowledge effective dates, completion/termination dates, renewal dates
- To identify and address potential risks and liabilities
- To define and set reasonable expectations for this relationship currently and into the future
The list is for understanding purpose only. The objectives might vary for transaction to transaction.
What are the scope of disclosure in Negotiations?
Generally, parties to the negotiation are not obliged to disclose any information, Unless there is a special circumstance, like:
• unequal bargaining power
• material fact known to the party
What are standard negotiation techniques?
Mutually decide on a timeline
• Understand the negotiation processes and the time that will be taken for each step by each party
• It should be the first item on any agenda for discussions
Prepare before Negotiation:
The preparation should ideally include:
•Gathering the required internal data.
•Analyzing that data.
•Looking at future plans.
•Defining the desired outcome of the negotiations.
•Understanding the goals of the other side.
Visualise your Goals:
Before Negotiations, you should know what best expectations you have from the contract:
-Realistic and achievable
- Identify your reservation points (what is unacceptable)
or “Best Alternative to a Negotiated Agreement”(Fisher, Ury and Patton, 1991).
The strategy is to prepare a few alternate options to your ideally set goal.
Research on the working of other Party:
• This helps in preparing for obstacles one might face
• You should make a list of decision makers on the other side and identify those who have power to grant concession
Get the transactions in Writing
•Have all agreements regarding concessions, special terms and conditions drafted into a formal document that is part of the overall set of official statements set out in the final agreement.
•Do not accept local subsidiary letters, mailed notes or verbal promises, as none of these, in all probabilities, would have any legal status.
I hope these points have been helpful for you. Please leave comments below if you think there are more things that could be included in Negotiations.