Lesson 18: Negotiation and Contracts

Negotiation is the ability to communicate with different people (who have

different interests) with the goal of finding a win-win situation: a solution
that benefits everyone. Having good negotiation skills is important for
resolving conflicts and reconciling differences of interest in business, politics,
and everyday life.

The different groups with different interests in a negotiation are called

the sides or parties. To begin the negotiation, one party makes an offer or
a proposal - that's the initial idea for the resolution of the problem. The other
party can then respond by making a counter-offer or counter-proposal - a
different idea for the solution - and the discussion progresses.

To reach an agreement, both sides in a negotiation will need

to compromise or make concessions - this means adjusting their
requirements to be more compatible with the other side's interests. The
parties will need to make trade-offs - exchange one thing in return for
another.

One party may also "toss in" or "throw in" some bonuses in order
to sweeten the deal (make the proposed agreement better or more attractive
to the other side). However, some points may be considered non-negotiable -
this means they are not flexible and cannot be changed.

Because negotiations are often complex, they may need to be done in

several rounds (sessions). If the negotiation reaches a point where it is
stopped and the sides cannot agree, it is said that the negotiation
is deadlocked or the negotiation has reached an impasse.

In this case, it can be good to bring in a mediator - that's a neutral third party
who can help the parties come to an agreement. When a negotiation was
stopped for some time and then suddenly makes progress, we say there was
a breakthrough in the negotiation.

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However, if the negotiation fails and the parties abandon efforts to find a
solution, then we say there was a breakdown in the negotiation. If one party
insists on a condition that the other party absolutely cannot accept, that point
is called a "deal breaker" because it prevents a deal (agreement) from being
made.

Phrases for Negotiating

Now that you know some general negotiation vocabulary, let's look at some
specific phrases. In all of these phrases, the word "we" is used because you are
probably speaking on behalf of (representing) a company or group. If it's an
individual negotiation, just change "we" to "I."

To make a proposal, you can say:

• We propose...
• We would like to...

These expressions are more polite and more diplomatic than saying "We
want."

To respond to a proposal, you can use these phrases:

• Regarding your proposal, our position is...

• As far as your proposal is concerned, we think that...

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If you'd like to make a counter-proposal, say this:

• May we offer an alternative?

• We have something a little different in mind.
• From our perspective, a better solution is...

During a negotiation, you will probably need to make concessions. You can
introduce a concession like this:

• We would be willing to ...

• We'd be prepared to...

Sometimes you want to offer the concession with a condition - that means, you
will do it IF the other side does something in return. Add these three phrases
to your concession in order to make it clear that there is a condition:

• if...
• as long as...
• provided that...

For example:

• We'd be prepared to increase our offer if you give us a ten-year

guarantee.
• We would be willing to sell you the property as long as full payment is
made within one year.
• We would be willing to split the profits with you provided that we
retain ownership of the product's patent.

If the other party expresses doubts, you can use these phrases to reassure
them:

• Let me assure you that...

• I can promise you that...
• Have no doubts that we will...

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When the other side makes a proposal and you need to say "no," it's important
to do it politely to preserve a good relationship with the other party. Here are
two ways to say "no" in negotiations:

• (weak): I'm afraid that doesn't work for us.

• (strong): I'm afraid that's completely out of the question.

Both of these phrases are polite, but the second phrase is stronger because the
expression "completely out of the question" means "completely
unacceptable"; it is something you will not even consider.

If you need to delay the negotiation before giving an immediate response, use
these phrases:

• We'd like to consult with our colleagues/lawyer/supervisor about

this.
• We'd like to discuss this amongst ourselves before giving our
answer.
• Let's meet again once we've had some time to think.

Finally, here are some expressions used to "close the deal" - that means
accept and finalize the agreement:

• That's acceptable to us.

• I believe we have an agreement.
• (informal): You've got a deal!
• (informal): Let's shake on it.
• Let's get this in writing.

The expression "let's shake on it" means to shake hands, because this is a
common way to confirm an agreement. The phrase "let's get this in writing"
means to put the verbal (spoken) agreement into an official contract or
letter.

Contracts
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Contracts are often divided into articles or clauses (the sections of a
contract) explaining the terms (conditions and requirements). They may also
contain an appendix (extra supporting information added to the end of the
contract).

When a person writes their name at the end of a contract, this is

called signing the contract:

As soon as it is signed, the contract goes into effect - that means it becomes
legally valid and applicable. Another way to say this is that the contract
is legally binding, meaning that the parties are obligated to do what it says.

If one party does something that goes against the terms of the contract, this is
called a breach of the contract. In some situations, the contract may
be terminated (canceled). However, if the parties do everything the contract
says, then they have fulfilled (completed) the contract.

You've finished Lesson 18! Take the quiz to review the vocabulary and
phrases, and log in tomorrow for the next lesson.

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Quiz: Lesson 18
1) After completing the negotiations, both parties _________ a confidentiality
agreement.

A. firmed
B. signed
C. effected

2) These negotiations are going to be very difficult, because the other side
refuses to make any ___________.

A. concerns
B. solutions
C. concessions

3) I'm afraid that's completely out of the __________. We are not willing to
consider changing the location of our headquarters.

A. question
B. round
C. proposal

4) The parties reached an agreement after more than twenty ________ of

negotiations.

A. rounds
B. offers
C. deals

5) The engineer committed a _________ of the contract by failing to do

performance tests on the equipment as was agreed.

A. clause
B. term
C. breach
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6) We've considered your proposal - may we offer an __________?

A. effect
B. alternative
C. interest

7) I believe we have an agreement! Let's get this in _________.

A. paper
B. writing
C. text

8) We would be ________ to provide training for all your employees in using the
new system.

A. available
B. willing
C. offer

9) Let me assure you that we have _________ every single one of our contracts
with previous suppliers.

A. fulfilled
B. breakthrough
C. compromised

10) Negotiations for the sale of the company appear to be __________ - maybe
it's time to bring in a mediator.

A. traded off
B. deadlocked
C. deal breaker

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Quiz Answers: Lesson 18

1.B, 2.C, 3.A, 4.A, 5.C, 6.B, 7.B, 8.B, 9.A, 10.B

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