Which are the strategies for a Contract negotiation?

By The Law Office of Yoel Molina.

You must usually negotiate before coming to a business deal. That is, negotiate the specifics of the agreement with the other individuals or businesses who are "party" by sitting down at the figurative table. Reviewing some of the tried-and-true bargaining techniques is a good idea if you're new to the game or just need a refresher.

There are several books available about negotiating strategies. A lot of advice is absurd. For instance, recommending that you offer coffee drinks and food that contains MSG while abstaining from yourself, and then watching as your bargaining partners give away the store while stoned. Insisting on negotiating points you don't actually care about so you can pretend to "give in" on them and obtain what you really want are two sneaky negotiation strategies that have the potential to backfire. Another is pretending to have another suitor waiting in the wings.

11 of the more typical and well-liked contract negotiation strategies are outlined below. Some of these tactics may seem common sense or even apparent, but they have been shown to be effective.

1. Divide the negotiation into several pieces. Some negotiations fail because the sides adopt an "all or nothing" mentality, whereby the opposing party must concur to all of their demands in order for the conversation to continue. By compartmentalizing the negotiations and coming to an agreement on each component separately, it is possible to get through this kind of obstacle. This gives the impression that you are winning several small battles rather than waging a protracted war. 
2. The stance of "I'm merely requesting what's fair." By using this strategy, it is emphasized that one party's demands are merely reasonable given the standards of the sector or the going rate. By employing this tactic, you are released from the duty of defending your demands or investing considerable time in securing them. The onus of persuasion transfers to the other party if you make it clear that all you're asking for are typical agreement terms, making it their job to persuade you to make an exception in this instance (and to make that exception worth your while by offering concessions elsewhere). 
3. The strategy of "getting to yes." The authors of this book stress that in order to reach an agreement (to say "yes"), the negotiating parties must: separate the people from the issues (i.e., take emotion out of the picture); look beyond the negotiating parties to determine who or what is the real interest or influence affecting each party; generate options to foster a problem-solving environment; and neutralize conflict by adhering to unbiased and simple-to-justify principles of fairness. 
4. Take charge. Controlling the negotiation's setting, timing, subjects, and pace, often known as "controlling the agenda," may be advantageous. For instance, lawyers frequently think that they are in control of the contract because they are the ones who draft it. Similar to this, you get to choose which issues are brought up and in what order is in charge of the negotiations. Sometimes, parties will take a passive stance to gain influence. For instance, they may appear to moderate the negotiations or offer to "summarize" the current situation (in a letter or brief statement at the start of a negotiating session). The party that frames the issues typically has greater power over how those issues are ultimately resolved, regardless of how the reins are taken. 
5. Put things in order of importance. Revenue and risk are often the main topics of contract discussions. However, it's obvious that some incomes and risks are more significant than others. When negotiating, it's important to understand what your top priorities are, which is typically the business or financial opportunity provided by the contract, and how your other priorities fall under them. By doing so, you'll be able to stay focused on your goals and prevent yourself from getting sucked into problems that aren't as vital to you. 
6. Using the "offer-concession" tactic. Ensure that the other party feels satisfied with the agreement they received at the conclusion of the discussion. Always allow yourself enough wriggle space in your offering to make reasonable concessions to the opposing side. Or, as one CEO put it, "The most important trip you may take in life is meeting people halfway." This also implies that you shouldn't enter talks by outlining your absolute demand. Instead, offer yourself leeway for negotiation. By doing so, you'll give the other side the impression that they've won something, and you might be shocked to learn that they're ready to give more than you had anticipated. 
7. Instead of making a demand, ask. Ask the opposite party why they are being so rigid on particular points if they are. Discussions begin with questions; disagreements frequently stop the dialogue. 
8. Look for areas of agreement and conclude positively. You must look for opportunities to say, "You're right about that," or "I agree," when using this positive strategy. These points of agreement, no matter how minor, can foster cooperation. At the same time, if talks span several meetings, make an effort to wrap up each one successfully. This also contributes significantly to creating a cooperative atmosphere that is more likely to foster development and produce an agreement. 
9. Make research. Typically, the party with greater information has the upper hand. For instance, you may have greater negotiating power if you know that the individuals who made an offer on your home have previously sold their own home and need to relocate immediately. If you're ready to allow them to conclude the sale quickly, you might be able to demand a greater price. Even personal information about the parties can occasionally have an impact on your capacity to foster a more cooperative environment. 
10. Dealing with demands and burnout. You will need to determine how much the underlying contract is truly worth to you if the other party uses threats ("Agree to these terms or there's no deal" or "There's no deal"). It's acceptable to accept the opposing party's demand or put up with prolonged haggling if the ultimate reward is so valuable. Similar to this, you might have to put up with anything for a while if the other party holds all the cards (for instance, if it's the only known customer for your goods). If not, leaving the discussions is frequently the wisest course of action. If the opposing party actually depends on you, it might reconsider its strategy and come back to the table. If not, you can move on to other, more fruitful negotiations. 
11. Use data, not emotion. Successful negotiators distinguish between personal and professional issues, as well as between emotions and facts. They try to prevent an unfavorable personality or bargaining approach. Additionally, they refrain from using words like "I believe" or "I think" throughout the discussions and instead place a greater emphasis on factual remarks.

If you have any questions about this article or similar matters, please contact our office, the Law Office of Yoel Molina, P.A., at fd@molawoffice.com or 305-548-5020, option