A negotiation is basically a process where two or more parties attempt to reach an agreement. Negotiations usually involve the parties exchanging something they have for something they want, and the exchange does not have to involve physical items. Many times, services or statuses can be exchanged just as easily as objects. Negotiations are used in many different areas of the law to resolve disputes (although they are extremely common in the area of contracts).
Negotiation can be an extremely useful tool to resolve disputes and save the parties from going through a long and expensive litigation. These proceedings are often informal, and less expensive or stressful than a full lawsuit.
Even if a lawsuit is pending, negotiations between both parties often take place at the same time to see if a settlement can be reached. More than 95 percent of civil claims are concluded by negotiations, and not by litigation.
Often the parties will go back and forth and talk freely about their needs and differences in order to come to the best possible agreement for all involved. If you are preparing to enter negotiations, you must consider what it is you want to achieve with the negotiation, and what you have to offer the other party in return (this offer could be anything valuable, whether money, services, or goods).
Once the other parties receive the offer, they can consider the value of the offer. They can decide whether to accept, decline, or present a counter-offer. A counter-offer usually makes adjustments to the original offer, and the first party can then determine whether to accept the adjustments or to make yet another counter-offer.
If all parties are in agreement, then they can have a contract drafted to establish all the terms of the agreement in writing. If the parties decline, of course, the negotiations come to an end, and they never reach the written contract stage.
Not everyone will cooperate and agree to engage in negotiations. That happens sometimes, but it does not mean that the negotiation process is dead. If the other party is uncooperative, you may still be able to facilitate negotiations through “assisted negotiation.”
Some examples of assisted negotiation include:
- Mini-trial: A mini-trial is an alternative method of dispute resolution, in which the parties present brief versions of their respective cases to an independent third party with some expertise on the situation. The “judge” then gives their expert opinion on the likely “winner” (if the lawsuit was real). The opinion is not binding on either party, but may help a previously uncooperative party come to the table and pick up negotiations;
- Early Neutral Case Evaluation: An independent third party with expertise on the matter is hired to evaluate the position of both sides. The third party’s evaluation then becomes the basis for further negotiations.
- Conciliation: A third party is hired to make sure that the two parties make progress in negotiation. The parties don’t even have to meet face-to-face if a conciliator is involved. The conciliator does not recommend solutions to the issues, but they make sure that negotiations keep moving.
Negotiation is almost always cheaper than litigation, and also takes less time. Litigation is far more involved and takes far more preparation up front. While negotiation can be conducted on the parties’ own timetable, litigation is always conducted on the court’s timeline.
With negotiation, you don’t have to wait for the court to schedule the case before it gets heard, or wait for the judge to settle another case before getting to yours. This can save a significant amount of money on legal fees, especially since attorneys often charge for their services by the hour, even if that time is spent waiting for a hearing to begin.
Negotiation gives the power to the parties rather than to a judge. All parties must agree with the outcome of the negotiation before it is finalized, where a judge can issue a ruling in a case that may leave both parties dissatisfied. The terms of the negotiation can also be personalized according to the circumstances in a case in a way that court outcomes can not.
While they may have some similarities, mediation is overseen by a mediator, who gives advice and works with the parties to help draw them into a mutual agreement. The negotiation process does not always have a mediator involved. Even if there is, the parties are the ones with control to decide the issue. The mediator’s role is simply to make sure that negotiations continue in a fair manner.
Arbitration is more like a lawsuit than mediation or negotiation. While negotiations are far more informal, arbitration has set rules and guidelines for all disputes. The arbitration process can be complex and formal, very different from informal negotiations.
Negotiations are not lawsuits. However, that doesn’t mean that you can’t consult an attorney to help you in negotiations. In fact, you may find it extremely helpful to consult an experienced business attorney, because attorneys are trained in negotiations and can help advocate for your needs and protect your rights in negotiations with the other party.
If you are involved in a negotiation process, it is in your best interests to talk to an attorney to make sure that you get the best possible outcome in the final agreement.