“. . . but if you try, sometimes you get what you need.” The Stones had it right – and even though they didn’t know it, their lyrics are right on for businesses and lawyers negotiating deals and the underlying documents.
In virtually all business negotiations, the objective is to reach agreement on fundamental terms that are fair, reasonable and mutually beneficial. True, each party wants the best terms possible, and in some cases, there will be specific deal points that are non-negotiable; but the bottom line is, if the deal isn’t good for both parties, there will be no deal. And businesses make money based on the deals they make – whether entering into a complex joint venture, selling products, or settling contentious litigation.
This means that businesses and their lawyers, in negotiating deals and even more so in drafting the underlying documents, will bring the most value and the highest likelihood of success (think ROI and EBITDA) by resisting the urge to overreach – particularly on issues that aren’t fundamental to the underlying business deal. Instead, they should focus on reaching agreement on the most important business issues under terms that are fair and reasonable and don’t create unreasonable risk or liability to either party or unfairly allocate that risk or liability. This is what leads to long term, mutually beneficial and profitable business relationships.
If you’ve ever participated in negotiations where the parties have reached agreement on all of the key business terms (e.g., price, payment terms, timing, duration, etc.) only to break down because they (or worse yet, their lawyers) can’t agree on choice of law, venue or what set of arbitration rules will apply if they have a dispute, you know what I’m talking about.
Negotiation and Deal-Making Advice 101 from BizB4Law – first, “get what you need” – then, maybe consider what else you “want.” But, keep in mind, the business only makes money if the deal is made.