Often when a dispute occurs, each party blames the other and the matter goes to court. This often severely damages a profitable relationship. However, this does not always need to occur. You can prevent the matter from escalating by undertaking meaningful negotiations with the other party to come to a result that you are both happy with. This article will explain when negotiation is appropriate and five strategies to ensure that everyone walks away with what they want.

When to Use Negotiation

Negotiation is the process of two parties coming together to reach an agreement over a problem, where both sides generally need to adjust their views and positions to achieve a solution.

You should always try to negotiate as a first step, particularly when:

  • you wish to maintain the business relationship with the other party;
  • there is a possibility that both you and the other party can walk away with what you want;
  • you and the other party have similar bargaining power, meaning one of you doesn’t have a strong influence over the other;
  • you don’t want to spend thousands of dollars on fees associated with court litigation; and
  • most importantly, you want to resolve the dispute as quickly as possible, allowing you to continue running your business.

However, negotiation is not always appropriate, particularly when the:

  • dispute is complex and involves many legal issues; or
  • other party has shown that they are acting unreasonably.


To get the most out of the negotiation process, you should keep the following strategies and tips in mind.

1. Consider Interests and Values Separately

When starting the negotiating process, you should always try to separate the person from the problem and tackle the issue in isolation. It is also useful to walk into a negotiation knowing what alternatives you have. A term for this concept is your BATNA (best alternative to a negotiated agreement). Your BATNA is the option you will take if you and the other party cannot reach an agreement. The better your BATNA, the better your bargaining power.

You should also think about the other party’s:

  • primary issues, wants and needs; and
  • BATNA.

This will help you develop your negotiation strategy and leverage your position, particularly if their BATNA is not as good as yours.

2. Avoid Aggressive Actions and Use Open Dialogue

When disputes arise, emotions can run high. One of the most important aspects of negotiation is to avoid being provoked into an emotional response. Regardless of how aggressive or unreasonable the other party may be, you must put aside your feelings and focus on the facts at hand to keep the dialogue open. This will help bring the dispute to a faster settlement.

It is also a good idea to avoid making threats or provocative moves, such as saying “we’ll take the matter to court” or try to ruin the other party’s business reputation. Such threats will only result in the other party responding in the same way, escalating the situation and making the conflict worse.

Open dialogue is also an effective tool to build a better relationship and establish a common cause. This dialogue can help you and the other party understand each others’ interests and values.

3. Appeal to Overarching Values

Disputes over money often involve deeper causes of conflict, such as a feeling of being disrespected or overlooked. The next time you find yourself arguing over money, it is a good idea to suggest putting the conversation on hold. You should then take the time to listen closely to each others’ complaints and try to come up with creative ways to address them.

For instance, if both of you would likely suffer damage to your reputation if your dispute went public, then you may agree to keep certain aspects of your dispute resolution process confidential. Reaching an agreement on some of the minor aspects of the dispute can help you build a foundation of trust and optimism that helps you to work together to resolve the main source of your conflict.

4. Confront Your Differences Directly

The areas where you and the other party disagree are opportunities to create a solution that meets some or all of their interests in a new, creative, and tailored settlement. Addressing your differences will not only create an agreement that suits both of you but can also help preserve or even enhance your relationship once you have reached an agreement.

5. Reach Closure

Once you reach an agreement, it is important that you record the terms in a carefully drafted Deed of Settlement and Release or Settlement Agreement. Your deed or agreement should capture the precise terms that you reached, leaving no room for further disagreement. Make sure that you understand exactly what you are agreeing to before executing any deed or agreement. It is extremely important that you only agree to a settlement that you can keep. There is no point agreeing to make a payment by a certain date and then lack the necessary funds.

Key Takeaways

It is a good idea to remember that the issue could be a simple misunderstanding. There may be facts or background issues that you do not know about, so it often useful to negotiate with the other party before taking any serious action. When negotiating, you should always bear in mind each others’ interests and values and work to coming to a settlement that is beneficial for all.

If you would like to understand your legal position before negotiating or would like assistance with a dispute you have, call LegalVision’s dispute resolution lawyers on 1300 544 755 or fill out the form on this page.

About LegalVision: LegalVision is a tech-driven, full-service commercial law firm that uses technology to deliver a faster, better quality and more cost-effective client experience.
Nessim Malak

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