How to Negotiate like a “Freelancer” (Part 2)

Negotiating at times can be a step forward and two backwards. It is expected that mistakes will be made along the way; each negotiation is unique for its level of complexity, subjects and interests behind them.

 (4) Promises are Exactly that, Promises.

A misleading way to encourage the other party is through promises. This occurs when the parties discuss future projects, to be fulfilled if the current business is carried out. These promises are not part of what is being agreed upon, and there is no guarantee that they will exist. Discard everything that is not the subject of the current contract.

Taking the example of DJ Walberton, after returning from his tour, he is looking for residence in several clubs. He meets with the owner of the nightclub “Metaphor” that is about to open. The owner says “Walberton, I would love for you to play in our grand opening. It will be a spectacular night, with dancers, the sponsorship of [insert alcohol brand here] and special guests. We are going to give you a lot of media coverage; this is going to explode, you will see. The thing is … since we are investing so much so that this first party looks good, we therefore have no budget for a DJ. However, if this first party is a success, obviously we will consider you for the next one – and then we can pay you!”

There is no guarantee that Walberton will appear in Metaphor after the first opening, it is better that he does not consider that fact when deciding whether to appear at the inauguration or not. The allusion to future events is a “promise”, and its purpose is to cloud Walberton’s decision-making so that he thinks the offer is juicier than it really is.

(5) Do not Postpone the Process.

Sun Tzu, the Chinese strategist and philosopher, in his work “The Art of War” proclaims some words that resound as relevant today as they were written twenty-one centuries ago – “nobody gains from a protracted campaign.” In war, as in business, deferring destroys the opportunity, and depletes resources in time, energy and money.

Negotiating at times can be a step forward and two backwards. It is expected that mistakes will be made along the way; each negotiation is unique for its level of complexity, subjects and interests behind them. But if you find yourself in a situation where the business reward almost equals the cost of acquiring it, it’s time to reconsider your efforts. You negotiate to make things happen, not to continue negotiating.

Do not meet a second longer than necessary. Set limits on your time, force them, being flexible at times. But above all, always remain prepared. It is clear that in prolonged negotiations, or suffering from an impasse, the parties cannot agree. What underlies that stagnation could very well be that the parties or some of them do not really know what they want from the negotiation. Or they are not communicating it effectively.

He who does not know what he wants is negotiating to see if the situation improves. He who knows what he wants, acts according to his objectives – to what he wishes to obtain, and to what he is willing to grant and to not tolerate. Moreover, he knows when to enter and leave the table.

(6) Knowing how to say no.

No one is obligated to negotiate. That is why contracts are agreements between free wills. You do not have to reach an agreement, no matter how much you feel you owe it to the other, or that you have invested time and resources. The need to agree, and the fault for pre-contractual damages, applies in rare cases, when the parties have advanced the negotiation in such a way that they have created a substantial expectation that they will indeed contract.

There is a verse from the song “Sleeping Lessons” by The Shins that is indicative of this principle – “you’re not obliged to swallow anything you despise.” Leaving the negotiating table serves a dual purpose – it saves you from bad agreements, and leads you to better terms.

It saves you from bad agreements because if you feel obliged to agree, you will accept any conditions as long as you reach a pact. That lends itself so that they take advantage of you. A good example is pressure situations.

“For a limited time,” “there are only 24 hours left,” “you have to tell me right now”; These are tactics to induce pressure. They cause stress that upsets your decision making and encourages hasty conclusions. When they put pressure on you, it’s because they feel pressure. They are trying to transfer that pressure. When that happens, don’t succumb; Say “no,” or do not answer within the stated time. Most likely, the opportunity will not disappear. And if they return, it will surely be with a more favorable offer.

For better terms, leaving the table can be a very powerful weapon which expresses a desire not to accept the offer as it is, even if that is a “bluff.” If the other party really wants to agree with you, or has no other option, their only remedy is to improve the terms.

However, and likewise, nobody is obliged to negotiate with you, especially if they have a better BATNA than to reach an agreement. BATNA is a term introduced by the Harvard Negotiation Project, which means “Best Alternative to a Negotiated Agreement.” If one has a better alternative than to reach an agreement, give up whenever it is more convenient not to agree. It is important to know the positions and alternatives of the other party, in order to anticipate their reaction to your withdrawal.

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If you are interested in knowing more about negotiating or would like assistance with your business needs, please do not hesitate to contact one of our knowledgeable attorneys at EPGD Business Law. EPGD Business Law is located in beautiful Coral Gables, West Palm Beach and historic Washington D.C. Call us at (786) 837-6787, or contact us through the website to schedule a consultation.

*Disclaimer: this blog post is not intended to be legal advice. We highly recommend speaking to an attorney if you have any legal concerns. Contacting us through our website does not establish an attorney-client relationship.*

Categories: Business Law | Business Litigation

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