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What To Watch For When the Talking is Over and It’s Time to Get the Deal in Writing
Most people think of negotiating as the verbal give and take that takes people from their different wants and needs to a point of agreement. That, of course, is the heart of negotiating but just as important is the transition to the written contract that formalizes the verbal agreement.
Here are the things that Power Negotiators look for as they move toward the written contract:
Don’t Let the Other Side Write the Contract
In a typical negotiation, you verbally negotiate the details, then put it into writing later for both parties to review and approve. I’ve yet to run across a situation where we covered every detail in the verbal negotiation. There are always points that we overlooked when we were verbally negotiating that we must detail in writing. Then we have to get the other side to approve or negotiate the points when we sit down to sign the written agreement-that’s when the side that writes the contract has a tremendous advantage over the side that doesn’t. Chances are that the person writing the agreement will think of at least half-dozen things that did not come up during the verbal negotiations. That person can then write the clarification of that point to his or her advantage, leaving the other side to negotiate a change in the agreement when asked to sign it.
Don’t let the other side write the contract because it puts you at a disadvantage.
This applies to brief counter proposals just as much as it does to agreements that are hundreds of pages long. For example, a real estate agent may be presenting an offer to the sellers of an apartment building. The seller agrees to the general terms of the offer, but wants the price to be $5,000 higher. At that point either the listing agent who represents the seller or the selling agent who represents the buyer could pull a counter-proposal form out of his or her briefcase and write out a brief counter-offer for the seller to sign. Then the selling agent will present to the buyer for approval. It doesn’t have to be complicated: “Offer accepted except that price is to be $598,000,” will suffice.
If the listing agent writes the counter-offer, however, he or she might think of some things that would benefit her seller. She might write, “Offer accepted except that price to be $598,000. Additional $5,000 to be deposited in escrow upon acceptance. Counter-offer to be accepted upon presentation and within 24 hours.”
If the selling agent were to write the counter-offer, he might write, “Offer accepted except that price is to be $598,000. Additional $5,000 to be added to the note that the seller is carrying back.”
These additions are probably not big enough to be challenged by either a seller or a buyer who is eager to complete the transaction; however, they substantially benefit the side who wrote the brief counter-offer. If the person who writes a one-paragraph counter-offer can affect it so much, think how much that person could affect a multi-page contract.
Remember that this may not just be a matter of taking advantage of the other side. Both sides may genuinely think that they had reached agreement on a point whereas their interpretations may be substantially different when they write it out. A classic example of this is the Camp David accord, signed by President Carter, President Anwar Sadat of Egypt, and Prime Minister Menachem Begin of Israel.
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Copyright © 2003 Roger Dawson
Copyright © 2003, The Negotiator Magazine