MODULE_P1New_M3

LEGAL WRITING
AND CONTRACT
DRAFTING

CERTIFICATE COURSE

DEVELOPED BY

MODULE - 3

PRE-CONTRACT NEGOTIATIONS

3.1 DEFINITION

“Negotiating in the classic diplomatic sense and collectively reach an understanding on the point
assumes parties more anxious to agree than of discussion that satisfies the interests of the parties
to disagree” in dispute. It is a process where people rather than
fighting among themselves sit together, evaluate
-Dean Acheson the pros and cons and then come out with an
alternative which would be a win-win situation for
The biggest reason behind this is in today’s fast- all.1
paced world nobody has time to sit back and fight,
in the case of a disagreement everyone looks for the Negotiation is one form of dispute resolution
best possible solution in less time. Today everybody mechanism which has a wide scope of happening
is focusing on the principles of fairness, seeking in a formal setting like in business, government
mutual benefit and maintaining a relationship. This branches, legal proceedings, NGOs etc. or in an
is what negotiation gives. Negotiation is one of the informal setting like a dispute among friends,
most important aspects in an individual’s life. Being marriage, divorce, parenting and everyday life.
able to negotiate well plays a key role in the overall
career of a person. But what is negotiation?

Negotiation can be understood as a discussion
between individuals to determine a disagreement

1 http://www.managementstudyguide.com/models-of-negotiation.htm

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3.2 SKILLS, STYLES AND TACTICS

Negotiation is all about dealing with people it, argue their positions forcefully, and, at times,
tactfully or diplomatically to make them reach a make threats.2 This style can be beneficial in the
short run, but ruins the chances of future as no one
solution that is beneficial to both of them would ever want to deal with such people again.

Negotiation means a series of ability that a Win-Win style
negotiator uses while doing the negotiation to reach
the goal that is intended for the negotiation. This is what major corporations try to do. They try to
Negotiation is all about persuading and influencing search for a middle way to the problem where the
parties. interest of both is protected. The parties mutually
agree to solution best for both of their interest.
3.2.1 STYLES Both the parties compromise equally, without
burdening anyone of them. This is which is best for
Every person has there one negotiation styles. the long run as well as in short run.
There are no particular parameters according to
which negotiation styles can be defined. However, Mixed style
broadly speaking there are three major negotiation
style that can be identified: In this the negotiation is done in a manner where the
needs of all the parties are tried to be met to the best
Win-Lose style of the possible options. And finally, after all, the
available options are put forward one of the party
This is more on individualistic line. The party tries to claims the best share.
persuade a party in a manner that the other party
does what they want ignoring their own interest.
This at times can be threatening. According to
studies of businesspeople and students, about half
of U.S. negotiators have an individualist style.
Individualists tend to claim value rather than create

2 http://www.pon.harvard.edu/daily/negotiation-skills-daily/identify-your-negotiating-style/

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3.2.2 TACTICS a situation where the party is not happy with the
compromise which the other party tries to do.
There are many tactics available for a person to While opting for this, the party is well aware of
choose from but it should highly depend on the fact the fact that the other party is in a need of a deal
that who is the other party and the relationship that and the party walking out is at a position to
the parties have. These are: renegotiate slightly above of what they were
doing originally. It is not what you want to pay
¯ SALAMI TACTIC: This tactic is named after salami or receive; it is what you need to receive or can
sausage. Whenever a person eats sausage it is afford to pay.3 For eg: A has a house in the
eaten piece by piece and not whole at a time. middle of the plot where B wants to construct a
Similarly, using the same approach the five-star hotel. Only the house of A is stopping
negotiator tries to convince the parties step by the construction. In this situation, it’s A who is at
step rather than giving a full solution at once. the higher platform then B and can use this
Because there are chances that if the solution to technique to negotiate the terms of the deal.
the problem is given in one go it is rejected.
Therefore, the negotiator divides the ¯ USING SILENCE AND TIME4: Never respond too
disagreement into several different contentions quickly to an offer. Pausing or even suspending
and then deal with them step by step. For eg: negotiations can convey that you’re not
When a person buys a second-hand car from a desperate to close the deal and that you have
well-known dealer. Is it just the car the person other options. Silence can force a surprising
negotiates for? It’s actually the car, getting the amount of pressure on the other party as well.
damaged parts replaced, getting a free service
for one year, getting the petrol tank filled for the ¯ ACCEPT DEFEAT: This tactic is used generally in a
first time for free, etc. all of this the person situation where the ties between the parties are
negotiates the price of the. It’s a fact that no more important than the deal being negotiated.
dealer will want to loose out on the deal just In this situation one of the parties accepts the
because of not getting the tank filled. Thus, the terms which at times are against his interest.
technique works here. For e.g: Negotiation to save marriage ties.

¯ WALK AWAY: This is a tactic where the party ¯ TAKE IT OR LEAVE IT: This is when the deal that
tries to pressurize the other party by walking the person gives is so attractive which is hard
away from the table. This generally happens in to say no to. And this is when the party giving

3 http://www.how-to-negotiate.com/tactics/
4 http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/

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the deal offers to either accept the deal or to ¯ PROLONG NEGOTIATION7: This is an Iranian style
deny it, no other option is offered. Such types of negotiation. Several of the speakers say that
of deals are so appealing that success is ensured Iranians have an amazing capacity to prolong
in most of the cases. For eg: Apple CEO Steve negotiations. In this regard, they are good at
Jobs’ main closer strategy was to offer an insane exploiting the willingness of people to accept
amount of money compared to other process instead of substance. For example,
contenders. Jobs perfected the take-it-or-leave- Iranians may create a virtual issue, begin
it approach and effectively rendered his subjects negotiating, and then create a scenario in which
blind to any other offer.5 everyone is talking about something that was
not on the original agenda, thereby stalling the
¯ POKER FACE ATTITUDE: This tactic is generally negotiations. Like, Iranians will negotiate the
used by buyers. In this rather than making the terms of a contract and then will insist on
other party aware of the fact that the buyer has negotiating the implementation of those terms.
got the exact product he is looking for, the That way, they can expect a concession at each
buyer keeps a straight face. He pretends that step in the negotiations while at the same time
though the product is good but it’s lacking son wearing down their opponents.
something maybe something like a great
bargain. He shows that he is keeping his option These are just several of the tactics used by
open, but at the same time maintains an negotiators. When faced with tricks and tactics,
attitude that he is interested in the product but it is vital to remember some key points:8
if an amazing deal is given. For eg: a person
going to buy a television. As a buyer, you should v If you prepare and plan your negotiations,
never fixate on a single product; always shop you will be more equipped to deal with
around and keep your options open. As a seller, tactics. You will always know where you are
you should always be prepared to seek more going, where you are in the process, and will
potential buyers.6 know what you can do if negotiations are
unsuccessful.
v The objective of the negotiator is to obtain,
efficiently, an agreement that is fair to both sides. We want to keep the relationship
intact.

5 http://www.ceo.com/strategy/9-negotiation-tactics-from-famous-ceos/
6 http://www.moneycrashers.com/negotiation-techniques-to-score-a-great-deal/
7 https://www.cna.org/news/events/2006-04-19
8 http://www.negotiations.com/articles/negotiation-tactics/

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v Remember you can only correct and control can be via a caucus, or even rescheduling for
the situation, not the other person. Our another day or venue.
focus has to be on the problem and the v Always know what you will do if an
process. agreement cannot be realized. Having that
knowledge can and will prevent you from
v A negotiator may not only require proceeding in a negotiation where tactics
negotiating the issue, but also the ground are muddying the issue. Know where you are
rules of the negotiation process. in relation to what you will do if negotiations
are unsuccessful, throughout the
v Recognize when a tactic is being employed. negotiation process. Do not allow the use of
Address the tactic with the other party. Do tactics cause an agreement to be worse that
not personalize it ("You are lying to me!"). what could have been done on your own.

v Always have sufficient confidence to stop
proceedings if they are not going well. This

3.3 PREPARATION

Preparation is the most important aspect of Ø UNDERSTAND YOURSELF9: Before we even
negotiation. To win it, one needs to get ready just begin to understand and apply best- and leading
like a tiger. One needs to plan strategically to be on practice negotiation, it is imperative that we first
the winning side. There is no particular mantra for a invest in understanding ourselves. The idea is to
successful negotiation, but going unprepared will optimize your strengths and find ways to
surely lead to failure. Being prepared will increase minimize the impact of weaknesses. In
the chances of winning. One should make sure that negotiation, it is important that we make use of
before sitting for actual negotiation one takes out personal profiling tools to highlight our areas of
time to prepare. Even if it’s just for few minutes preference within the context of negotiations. It
sitting in the car. enables us to have a reference point from which
to plot our skills development.
Some steps that can be helpful in preparing for
negotiations can be:

9 http://biznegotiation.typepad.com/jan-potgieter-blog/2010/04/the-top-5-components-of-preparing-for-a-negotiation.html

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Ø Know the context of the deal: It is important to resources and possible alternatives and
have an idea about the circumstances and solutions. It’s good to know the other side’s
environment in which the negotiation is taking situation and modify it to favor you. Throughout
place. The context differs in every negotiation. a negotiation, you should do tons of listening,
clarifying and checking. And when your turn
Ø NEGOTIATION POINT CHECK: As Sun Tzu, the comes to put over your case, you should use
author of "The Art of War", said hundreds of every skill you can muster to make sure they
years ago, "Engage only when it is in the understand.11
interests of the state; cease when it is to its
detriment. Do not move unless there are Ø Get a BATNA: A BATNA is your “Best Alternative
advantages to be won."10 Try to figure out to a Negotiated Agreement” and is the only
beforehand that will the negotiation be certain way to be successful in negotiations. By
advantageous to you or not? If the answer to preparing for negotiations with one party by
this is NO, then there is no point negotiating. sounding out an alternative deal with another
party gives you walk away power. It means that,
Ø SET A TARGET: Clarify in your mind what is the even if the alternative isn't quite what you want,
solution you intend to reach at. Make a detailed you are still prepared to go there, if need be.12
picture of what you are exactly looking for?
Having an aim will help one negotiate Ø BE READY WITH QUESTIONS: How? Where?
accordingly. Being specific with one’s When? Why? Who? What? Always be ready with
negotiation goal will make one more confident, answers to these questions beforehand. These
giving an edge over the other party. are the most common question that arises in
Consequently, will help to achieve the objective most negotiations. Also, many times solution to
one wants. the problem comes out from these questions
itself.
Ø CORRECT INFORMATION: After setting an aim,
the next and the most important is to do deep Ø MENTALLY PREPARED: Getting into the right
research on the point, to collect the information frame of mind is very important for a successful
needed. The information collected should be negotiation. Some preparation steps could be:
about the interest of both the parties, necessary ü Being in awe of something is OK, but don’t
show it.

10 http://www.businessknowhow.com/growth/negotiations.htm
11 http://www.businessknowhow.com/growth/negotiations.htm
12 http://www.managetrainlearn.com/page/preparing-for-negotiations

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ü Be calm, composed and easygoing. Ø HAVE NEGOTIATION POINTS: One should
ü Be in a business mood: attentive, sturdy and always plan the possible negotiation points. The
best way is by preparing a list. After doing that
firm. write down the contentions to deal with each
ü Never wear your heart on your sleeve. issue. Also, with that try and think from the
ü Never underestimate or overestimate other side and see how they will deal with the
issue. This will help counter the other party’s
yourself. points during the negotiation in a better way.
ü Go with an open and clear mind. Since, one will already have an idea of the other
ü Be a good listener first, and then a speaker. side.

3.4 NEGOTIATION MODELS

There are various models of negotiation: Lose-Lose Model

Win-Win Model As the name suggests, in this model, the outcome of
the negotiation is zero. No party is benefited out of
In this model, each and every individual involved in this model. In this model, generally, the two parties
negotiation wins. Nobody is at loss in this model and are not willing to accept each other’s views and are
everyone is benefited out of the negotiation. This is reluctant to compromise. No discussions help.
the most accepted model of negotiation.
For Eg: Mike got selected with a multinational firm
Win-Lose Model of repute. He was called to negotiate his salary with
Sara- the HR Head of the organization.
In this model one party wins and the other party
loses. In such a model, after several rounds of Case 1 - Sara quoted a salary to Mike, but Mike was
discussions and negotiations, one party benefits not too pleased with the figure. He insisted Sara to
while the party remains dissatisfied. raise his salary to the best extent possible. After
discussions, Sara came out with a figure acceptable

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to Mike and she immediately released his offer opportunity as it was his dream job and he was
letter. Mike got his dream job and Sara could eyeing it for quite some time now. He had to accept
manage to offer Mike a salary well within the the offer at a little lower salary than expected. Thus
company’s budgets - A win-win Situation (Both the in this negotiation, Mike was not completely
parties gained) satisfied but Sara was - A win-lose negotiation

Case 2 - Sara with her excellent negotiation skills Case 3 - Mike declined the offer as the salary quoted
managed to convince Mike at a little lower salary by Sara did not meet his expectations. Sara tried her
than he quoted. Mike also wanted to grab the level best to negotiate with Mike, but of no use.-A
lose-lose model of negotiation. Nobody neither Mike
RADPAC Model nor Sara gained anything out of this negotiation.

RADPAC Model of Negotiation is a widely used D – Debate: Nothing can be achieved without
model of negotiation within corporates. Let us discussions. This round includes discussing issues
understand it in detail. Every alphabet in this model among the parties involved in the negotiation. The
signifies something: pros and cons of an idea are evaluated in this round.
People debate with each other and each one tries to
R – Rapport: As the name suggests, it signifies the convince the other. One must not lose his temper in
relation between parties involved in negotiation. this round but remain calm and composed.
The parties involved in the negotiation ideally
should be comfortable with each other and share a P – Propose: Each individual proposes his best idea
good rapport with each other. in this round. Each one tries his level best to come
up with the best possible idea and reach a
A – Analysis: One party must understand the second conclusion acceptable by all.
party well. It is important that the individual
understand each other’s needs and interest. The A – Agreement: Individuals come to a conclusion at
shopkeeper must understand the customer’s needs this stage and agree to the best possible alternative.
and pocket, in the same way, the customer mustn’t
ignore the shopkeeper’s profits as well. People must C – Close: The negotiation is complete and
listen to each other attentively. individuals return back satisfied

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3.5 THE PROCESS

Process is the procedure that should be followed for One needs to plan communication style and the tone
a peaceful and fruitful negotiation. During the they will use. To know what to plan exactly, here’s a
negotiation, there are a lot of twists and turns recap of the points one needs to be ready with:
involved. One needs to make certain choices,
compromise at few places, to achieve the desired v Know yourself and the other party
outcome. To make the correct choices, it’s very v Have a clear agenda to negotiate
important to be aware of the negotiation process. v Look into the interest of both the parties
Negotiation process involves three phases: v List out the negotiation points
v Be ready with a proper in-depth research What
CONTRACT PROCESS
to do if negotiation fails
PHASE 1: Planning
PHASE 2: DOING: This phase starts as soon as the
PHASE 2: Doing parties enter the room to negotiate. The person
should keep in mind following tips to ride through
PHASE 3: Ending the negotiation process easily and walk out with a
content feeling after finishing the negotiation
Ø Planning successfully. This phase can be further divided into:
Ø Doing
¯ Discussion: It is during this stage that the parties
ü Discussion open up with their version of the dispute. In a
ü Clarifying goal way, they put forward their understanding of
ü Negotiate the situation.
Ø Ending
ü Agreement ¯ Clarifying goal: This stage as the name suggests
ü Implementation of plan of action
is to explain the interest, agendas and
PHASE 1: PLANNING: Planning talks about the
preparation steps talked about in the above section. perspectives of the parties to each other.

Clarification is an essential part of the

negotiation process, without it

misunderstandings are likely to occur which

may cause problems and barriers to reaching a PHASE 3: CLOSING: This phase starts at the end. It is
beneficial outcome.13 all about wrapping up the process. As they say, all’s
well that ends well. Thus, after a successful
¯ Negotiate: This stage marks the end of the negotiation it vital to close the deal correctly. This
phase. After the discussions and clarification, phase can be further divided into:
the parties together try to reach to an outcome
which would be fruitful to both of them. Ø Agreement: This is when a possible outcome
Alternatives, compromise situations etc. all are is reached and agreed by both the parties. It
given at this stage. should be clear so that both the parties have
a clear picture of whatever has been decided
To sum it up: and there is no confusion.

Ø Start by introducing and putting forward Ø Implementation of the plan of action: This is
the agendas you plan to negotiate on. the last stage of the process. Whatever is
decided is implemented.
Ø Make the first offer, if not then never
accept the first offer of the other party. It To sum it up:
is proven that people who take the first
proposal are less satisfied and regret their Ø After everything is done look back and go
haste.14 through the agenda and the contentions
once again.
Ø Be calm, composed and confident
throughout the process. Ø Get the agreement in writing signed by both
the parties.
Ø Develop an understanding of the other
party’s frame of mind, how they are Ø Follow up.
negotiating and what they are aiming at,
during the process.

Ø Discuss thoroughly each point, whether
it’s their or yours.

Ø Keep on giving alternatives and listening
to their options.

Ø Give and take.

13 http://www.skillsyouneed.com/ips/negotiation.html
14 https://www.business.qld.gov.au/business/running/managing-business-relationships/negotiating-successfully/negotiation-process

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3.6 TIPS FOR SUCCESSFUL
NEGOTIATION

It's time to negotiate! Here are a few golden rules to displaying frustration or anger. Remember
successful negotiations: some people will do anything to intimidate
you.
¯ Always try to negotiate for at least 15
minutes. Any less than that and it is unlikely ¯ Acknowledge what the other party
that either party has had enough time to says. Everyone likes to know that what they
fairly consider the other side. Generally, the say is important. If the other party opens
size or seriousness of the negotiation first, use it to your advantage, by
determines the amount of time needed to paraphrasing what you have heard. Repeat
negotiate it. Setting a time limit is a good their important ideas before you introduce
idea. Approximately 90% of negotiations get your own stronger ones.
settled in the last 10% of the discussion.
¯ Pay attention to your own and your counter
¯ Always offer to let the other party speak partner’s body language. Review the chart
first. This is especially important if you are below to learn how to interpret body
the one making a request for something such language during the negotiations. Make sure
as a raise. The other party may have that you aren't conveying any negative body
overestimated what you are going to ask for language.
and may actually offer more than what you
were going to request.

¯ Always respect and listen to what your
opponent has to say. This is important even
if he or she does not extend the same
courtesy to you. Do your best to remain calm
and pleasant even if the other party is

Language to use to show Language to use for
augnrdeeermsteanntd Boionndg ya/L apnoguinagte:
oobfPfojeesrsci:bt lieomne oannin ag point or
Avoiding Eye Contact
• Lying
ü I agree with you on that • Not interested
point.
• NotütellUinngdtheerswtahnolde wtruhtehre you're
Serious Eye Contact
• Trying tcooimntimngidfartoem; however, ...
ü That's a fair suggestion. LSNahecorküvwooinuf cIgsc'nomoaenmnsfpgsipderrereonpmcaeriseed,
• to
ü So, whTaout cyhoinug'rtehesafaycine/gfiidsgeting but...
that you... •
•
ü In other wordsN,oydoduinfgeel
that... • SubümisTsihone way I look at it...
• Agreeing
ü YouShhaavkeinag tshterohnegadp/otuinrnting away • Willüing TtohecowmapyroImsiesee things...
there.
• FrusütratIfedyou look at it from my
ü I think we can both agree DInisdaigsbreepeliioenfignwt oithf vaiepowin..t.
that... •
•
ü I don't see any problem
with/harm in that. ü I'm afraid I had something

different in mind.

ü That's not exactly how I look
at it.

ü From my perspective...

ü I'd have to disagree with you
there.

ü I'm afraid that doesn't work
for me.

ü Is that your best offer?

3.7 TROUBLESHOOTING

The negotiation process is all about solving the ü TIME BOUNDATION: This is one of the
dispute by sitting across the table and discussing. It strategies that a lot of people try to use in
is obvious that the road will not be easy as the negotiation to bring the ball in their court.
parties coming will already have opposite opinions They may try to pressurize the party by
on the same points. Therefore, there are certain putting unnecessary and unexpected time
hitches that can be faced during the process. These pressures. They try to push the other party a
can be: step behind and compel them to take the
decision in their favor.
ü COMMUNICATION: one of the most
common issues during the negotiation ü LAST-MINUTE WAVERING15: Just when you
process. Communication means putting think that negotiations are over and you
across your point of view exactly the way have reached the agreement, the other
you think. If communication is not done party begins wavering over some seemingly
properly it can create misunderstandings, trivial point. The other party knows that your
thereby giving rise to an unproductive defenses are down as the negotiation nears
negotiation. completion and they ask for another
concession. Actually, the other party can
ü BEHAVIOR: Negotiation becomes a tough waver several times, squeezing several
job if the parties, or even any one of them, additional concessions from you each time.
have antagonistic behavior. This makes the
whole process very negative and ü UNDERSTANDING OF THE ISSUE: there are
unproductive. Bullying, sarcasm, guilty times when negotiations are not successful;
feeling, bribe, showing superiority, insulting the reason behind this can be not
words etc. are some of the signs of an understanding the real and correct agenda.
aggressive behavior. If the root cause is not figured, negotiation
process will be completely off beat and
15 http://www.tero.com/negotiationchallenges.html consequently an unproductive negotiation.

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ü HINDERING PROGRESS16: Negotiations must can do. Planning is the first and most crucial
move forward in order to reach a decision. step of negotiation, without this the
If one side is being obstinate with no room negotiation will only be a failure. One should
to concede, you may need to take a more never underestimate the other party.
drastic approach. Ask him if he wants to
continue with the discussions. Perhaps he ü WRONG ATTITUDE: one should never be too
would like to speak with someone else. Ask rigid, or too flexible or overconfident, or
him if he is uncomfortable and if there is under confident. It is very important to have
anything he needs to make him feel at ease a balanced attitude. One should be clear-cut
with the negotiation. By reaching out to let and definite in communicating while
him know that you are putting his needs negotiation process.
first, you may find progress with the
negotiation.

ü NO PLANNING: Going to negotiation
unprepared is the worst thing that a person

16 http://www.ehow.com/info_7978779_problems-faced-during-negotiations.html

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3.8 GLOBAL NEGOTIATION MODELS

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3.9 CONCLUSION

As Jim Hopkinson says, “There is an opportunity to
make thousands of dollars within few minutes, you
have to take advantage”. Negotiation in almost all
the businesses and spheres of life is a norm and not
an exception. Doesn’t matter that a person is
signing a deal in the fast-paced city of New York or
in a backward area of Amazon Jungle or in a
traditional city or Jerusalem or in a developing city
like New Delhi, a common step is negotiation.
Therefore, knowing negotiation and developing
this quality is a must in today’s world.