How to Respond to the “Deal Breaker” Issue – Part 2 of 2

So, now that you’re confronted with a deal breaker issue, how can or should you respond?  There are really only a few choices and strategies – here they are, along with some additional tips:

  • Before doing anything, keep in mind the basic premise of this blog – the business issues are more important than the legal ones.  From a business perspective, when you first considered the deal you wanted to do it – again remember, you make profits from doing (good) deals, not from walking away from them.  You walk away either because the risk became too great, or the upside became too small.  It’s the difference between prosperity and survival.  You want the former, but you need the latter.
  • Next, carefully consider – is this really a deal breaker, or is it just something that makes the deal more complicated, less appealing, etc.  If the latter, it’s really not much different than any other issue to be negotiated; if the former, it will decide whether the deal happens at all.
  • Assuming it really is a deal breaker, is it a business or a legal issue or a combination?  This may dictate who responds (client or attorney) and how.  Whenever possible, on issues of this importance I’d rather have the business person respond rather than the lawyer.
  • Consider whether compromise, restructuring, or further negotiation might lead to an acceptable resolution for both parties.  In doing so, analyze the issue from both your point of view and the other party’s point of view.  This may be a deal breaker for you but may not even be particularly important to the other party – you’ll want to know this before responding.
  • Next, make the other party aware of the issue, and (again, assuming it’s truly a deal breaker) be clear that, if the issue cannot be resolved to your satisfaction, you will (have no choice but to) walk away from the deal.
  • If at all possible, don’t just identify the issue, but rather, suggest a (or several alternative) solution(s) that you believe will work for both parties.
  • In discussions with the other party, be careful not to ascribe bad motives or intentions.  This can end discussions before the alternatives are even considered.

In the end, you may have a decision to make – is the deal worth the risk, or is it one you have to pass on?   But of course, you only want to make this decision after considering all possible alternatives.

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