Author
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Sarah Colman
Principal Advisor, Team Lead – Commercial & Analytics
Published
16/04/2021
Navigating precontractual or dispute negotiations can be challenging at the best of times! So how can we best prepare for negotiations? Firstly, we recommend considering the nuances of your negotiation as this may provide some helpful insights.
During precontractual negotiations parties are more likely to be collaborative, motivated to build a good working relationship and wanting the same outcome – to execute the contract and start work. Conversely, in a dispute context the relationship is likely to be strained and have deteriorated over time, the parties may be under pressure to resolve the dispute, avoid litigation or just want to ‘win’.
The circumstances of your particular scenario may influence how you prepare for, or run, the negotiation.
Here are a few tips for helping you successfully navigate negotiations whether in a precontractual
or dispute context:
Prepare and prioritise
Whether you’re in a precontractual or dispute context, planning is key to successful negotiations. Plan your negotiation strategy and prioritise the issues and know which issues you will raise first. Know your fallback positions and your BATNA (best alternative to a negotiated agreement), i.e. if an agreement cannot be reached, when will you walk away?
Set the ground rules (both internally and with the other side)
Work with the other side to define the rules/procedures of the negotiations (e.g. timing and agenda, communication channels, and who the decision-makers are for each side). Set internal ground rules so that everyone in the negotiation team knows who is responsible for what. In a dispute context ensure all correspondence is being sent on a ‘without prejudice’ basis and contract processes are being followed.
Separate issues from emotions
Compare a precontractual negotiation with a dispute. In a precontractual context the parties will be motivated to develop a good working relationship so it’s important not to damage this relationship during negotiations. Ideally you want to develop a relationship of trust, understanding and respect with the other side. In a dispute context this may be more difficult, but remember you are dealing with human beings and managing your emotions will be important to enable issues to be resolved.
Clarification and justification
State what you want and why – being able to bolster and justify why your position is important. Communicate your interests so that the other side understands why they are important and legitimate. Allow the other side to be similarly honest about their needs and expectations. Also know the potential areas of weakness in your arguments or justifications.
Problem solve and generate options
Ask questions such as ‘why?’ and ‘why not?’ and try to find mutual gains. If you’re trying to change the other side’s mind, it helps to understand where their mind is now. Try to generate creative solutions and remain open-minded and avoid becoming entrapped on positions.
Seek objective standards
If possible, use external, independent and legitimate standards. Using factual information from a credible source can be helpful. For example, finding case law that supports your position in a dispute, or objective standards that can be applied in a precontractual negotiation context.
Think about the context of your negotiations and how this might affect your strategy and tactics. The more preparation you do, the better equipped you’ll be in the negotiation room.
