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Business Negotiation

The article gives a detailed information about the business negotiations and the various other types and procedures related to it. Business negotiation comes under the negotiation types, it can be seen in business organizations where as to how the negotiation will help in business firms and how to negotiate with your counterpart in an organization regarding any business project or any business-related activities in the organizations as such.

A small subject as to how the contracts which are also been included while negotiating in the business are legally binding and how they have a place in the business negotiation is been discussed in further article.

Business negotiation is where both are involved and both of them have their own aims, goals and viewpoints to hence settle the disputes in between both the parties regarding the business or organization. Basically, when one lookup for the exact meaning in between the parties regarding the business negotiation then one finds that the parties involved in the meeting are always either the corporate entities, vendors or else the employees of the companies.

What Is A Business Negotiator?

  • A business negotiator is a professional negotiator who helps the parties to come to an acceptable business solution with their stakeholders or as the case may be. The business negotiator is the one who settles the disputes amongst the parties regarding the business issues and disputes with his skills, and knowledge about the business negotiation.
  • Talking about the skills, these can be in two ways, firstly, as informal day-to-day transactions and secondly, the formal transactions in between the companies, regarding the sale, expenditure, lease, and other legal contracts as well.
  • A professional business negotiator has all of the abovesaid skills as well he/she is a good negotiator.

What Are Business Negotiations?

  • Setting aside the definition as mentioned earlier, business negotiations are far more beyond than one can think, especially while negotiating with a company the other party might give various alternatives which will be the best for both the company, but there may be some alternatives which may not fit best for the other party, due to which there may be some exchange of heated arguments. Then, over here even if the firms are deeply rooted but there will be no way around for the party with the alternatives so MESO's are the best alternatives which can be given as the same to the other party for meeting the best possible outcome for both the parties.
  • In most of the Business Negotiations, bargaining is the hardest, because giving away a single penny more than which is required away as assuming that the other party or counterpart may be satisfied is not an approach. Figuring out, what are all the easiest and rarest of approach so that creative solutions can be found out for the problems is way necessary. For business negotiations arriving at a solution which shows up mutual benefit for both the parties and the best suited alternatives which mutually the parties agree with is too much essential.

What Are The Characteristics Of Negotiation Skills?

  • The characteristics which are required for negotiation is at initially to listen carefully. While you are listening you get to know about the other person's point of view which will further lead to better bond in the between the company and will also clear the doubts people have in their minds. Through listening you also as a hosting negotiator or maybe professional or a negotiator will get to know about the frequent asked question in the meeting which will thus help you as a negotiator of the company in the next meeting of the same subject-matter as well.
  • Developing a great interpersonal skill will exactly help you to develop skills for negotiating with the people around you as well. The interpersonal skills depend on your entire personality as well as like how as a person your attitude you keep towards people or to a person or to a particular matter or a thing as well.
  • The next important skill as in negotiation is to be specific and clear about the techniques that you are going to follow in a particular meeting. Attitude says a lot of things about how a person is so whenever negotiating a meeting it is very important to develop a right kind of attitude and also to adapt such an attitude which will be deem fit to be in a meeting while you are as a negotiator in the meeting, attitude towards a subject-matter and to in a meeting will help you reach your goal easily as because with a right attitude more people will be inclined to your work. They will help you reach your goal.
  • The ability to express thoughts verbally, good communication skills, listening skills, judgement, and general intelligence rational kind of, patience, decisiveness, are more of the skills which adds up to the list of negotiation skills.
  • These all skills will thus help you to be aware about the other person style and also about the process which the other person might follow during the negotiation process and these skills will also will let you get to know, think, and talk flexibly about the possible areas in the negotiation skills.
  • Since, we are talking about the business negotiation it is also very important under this subject to note about the contracts that take place in the companies widely. Business negotiation theory considers many topics about the contract into this which generally many companies come under an agreement where certain valid and legally enforceable clauses are lastly to the agreement are written, which through mutual consent and agreement the companies sign it, which after passing the second stage of the negotiation theory becomes a contract and hence becomes valid in the eyes of law.
  • Before to get into the contracts under business negotiation, let us see what actually are these stages under negotiation where the agreement turns into a valid contract and what happens when it doesn't?
So, under the Indian Contract Act, 1872 it clearly lays down the steps where the agreement if void cannot turn into the contract and if enforceable in the eyes of law it will be valid and hence it will turn into an enforceable contract.

The three stages under the negotiation skills are:
Pre-agreement stage:
  • Under this stage the negotiation contract will be initially just an agreement and will neither be binding on any of the parties, so, under this stage the negotiator will initially according to the rules mention in the said act and of the negotiator's act will make the party aware about their agreement regarding the dispute for which they have taken the negotiation process to resolve it.
  • The agreement will be void until it is enforceable under the law, after passing this stage.
  • But during this stage only the negotiation agreement turns void as because the negotiation agreements are not legally binding on either of the parties in the disputes, they can take their case to the court if not satisfied with the decision and this is why negotiation agreements are not legally binding in India as of now.
Agreement stage:
  • Under this stage the actual agreement whether it is any kind of agreement except the negotiation agreement will be not binding but will be a proper agreement with all the clauses and facts and issues containing in it of the disputes in between the parties.
  • This agreement will be given to both the parties and since the parties will decide whether to agree upon the clauses, terms and agreement as given in the agreement by the opposite party.
Post agreement stage:
  • Under this stage the agreement is already been seen as an enforceable agreement which is valid and not taken as void agreement in the eyes of law.
  • The agreement when comes to this stage will be turned into a contract which will be legal but not binding on between either of the parties.
  • Now, the contract will be signed through mutual consent and agreement basis by both the parties and both the parties in front of the negotiator will agree to all the terms and conditions and clauses as per in the contract mentioned.
  • Since it is a contract now the parties and that both the parties have agreed upon the terms and conditions mutually it will taken as a mutual agreement between the parties.
  •  If in the future any of the parties disobeys or violates any of the terms or clauses therein mentioned then the aggrieved party has the full right to take the matter Court.
Now, looking up to the procedures under the business negotiation for contracts and how it is applicable to the limit and the sustainability of the Business Negotiation Contracts.

What Is Contract Negotiation

  • Contract negotiation is basically, a pre-determined approach wherein there is a certain goals or action which are to be achieved either by a company or firm with the help of the best strategies of negotiation, this specific goal or objective which is yet to be achieved are generally also with the help of other party or parties, potentially to find and make an agreement or contract in a negotiation with another party/parties, for accomplishment of it.

What Is A Contract Negotiator For Hire?

  • There are many people, companies and firms who do not want to take up the negotiation process, because they don't enjoy it since they are always in a rush of things so that they will be over the dispute, this may rarely help some of them for short term, but looking at it towards a long-term goal which is to be achieved so it really is not worth it.
  • If such disputes happen in between the parties, they rather get over it, which may not help them as because the contracts are signed quickly and are thus tend to be lousy.
  • Getting professional help, at instance whenever there is a situation regarding such disputes in company will always have a positive outcome and can come to a great help, this will also lead to the clearance and worth of the final product of the company.
  • Preparing a term-sheets may help to get in more incline with your work on the project and thus will also let you know about the previous data's regarding your project and also the statues of it, preparing the term sheets can get in to help for at large, and this is how you will get to know more about how much profit you have gained and what made you stand by the loss in the business, as to what are the statistical data which shows the loss incurred, profit which is gained and sales and expenditure of the previous years and the current year also. This will address to big picture items into this.

Essential Of Business Contracts

There are generally six must require , essential elements of the business contracts for a contract to be valid (enforceable by law).
  1. Offer:
    every contract must include a specific offer which is to be made under a contract to get it valid because, the offer here is the most important thing in the contract, because under this the parties get into an agreement and will therein accept the terms and conditions or will reject it. Making an offer by either of the party to the other party is where they are laying down their goals and objectives through the offer making.
  2. Acceptance:
    whenever any of the party makes an offer regarding the business- matters of the company or else of the partnerships , it is on their counterpart whether to accept the said offer or no. whenever the other party accept the specific offer by their counterpart means acceptance of their offer and that they agree upon the issue on the same way.
  3. Consideration:
    taking into consideration about any of the parties' ideas, thoughts and questions regarding the project or the business encourages the other party to make an effort into the business- ideas and projects and thus get them into a win-win situation where they think that they have shared same positive in the meeting which will thus help you to achieve your company's goal and making a strong bond with the other company in partnership business.
  4. Mutual consent:
    consent is very important. But the consent shouldn't be from only one party like both the parties should mutually agree upon any of dispute's resolution or the terms and conditions laid down for the same. Mutual consent means that both the parties have agreed upon the said thing of the business and that this matter will be resolved any way further, but, neither of the parties should be coerced or forced for signing of the contract , only then it will taken as creating a binding agreement if any of the parties does not take it serious in the signing of the contract only then it will not be a contract.
  5. Competence:
    Both parties must be of "sound mind" to comprehend the seriousness of the situation and understand what is required. This definition requires that neither party be minors, both must be sober (not under the influence of drugs or alcohol when signing the contract), and neither can be mentally deficient. If one party is not competent the contract is not valid and the non-competent party can disavow (ignore) the contract.
  6. Legal purpose:
    The contract must be for a legal purpose. It cannot be for something illegal, like selling drugs or prostitution. Remember that it is not illegal to enter into a contract that doesn't have all of these essential items; it just means that if an essential is missing the contract cannot be enforced by a court.

When A Contract Must Be In Writing

  • Contracts that involve the sale of goods, agreements relating to mortgage, sale, lease, etc. must be attested by the witnesses present and should be signed by the parties and to be registered by the parties in order to make it binding on law.
  • Although other types of contracts may be oral, it is advisable to get it in writing to insure both parties understand their obligations. If court enforcement is required, a written contract shows the parties' obligations and avoids a he said, she said dispute.
  • There are many national and international and governmental contracts as well which are taken into the business negotiation contract where these contracts are made with mutual consideration and consent of both the parties at high-level.

What Is Effective Negotiation

  • Effective negotiation is a method into which people settle out their differences in between them but without going through any of the heated discussions or else without any of the arguments in the negotiation process.
  • When there is any kind of disagreements in between the parties, either of the parties here does not get into a debate or fight with other regarding the disagreement they understandably handle the matter and take the situation calmly and thereafter it is also easier for both the parties to get to a mutual point to agree upon and get their issue solved. This may be the best possible outcome for both the parties to achieve their goals of their positions or perhaps their organization that they represent to.

Best Possible Strategies In Business Negotiation

The two of the most common strategies are:
  • Best Alternative to a Negotiated Agreement (BATNA)
  • Worst Alternative to a Negotiated Agreement (WATNA)
  • Walk Away Price (WAP).
You should be the only one to know your position in the negotiations. When negotiators know about the weak position of their counterparts, they will instantly deduce that their opponents are desperate and will negotiate from that point.

It also includes collecting information about the problems to be solved in the negotiation. Following the negotiation, both parties should try to revive relationships that may have been harmed during the negotiation process.

Written By Presha Naik
, a student, from S.N.D.T Law College, Santacruz, Mumbai.

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