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What did I just agree to, again?

Ellis Croft
Negotiation Agree Surprise [Converted]
© Adobe Stock

One area of negotiation that can end up being frequently overlooked is agreement. In other words, the specific terms and conditions parties are binding themselves to in the contract that the negotiation will produce. For some (including for many years, me) this can be challenging – after all, if the main issues have been traded around to the point that parties are comfortable then agreement must naturally follow. Right?

Well, not quite. Sometimes this can stem from a misunderstanding around the specifics of a particular issue, and failing to address them individually during negotiations. I once negotiated a six-figure deal with a supplier (which was substantial for my part of the business), part of which involved some of their employees needing to travel to offices in the US and Asia to fulfil their obligations under the terms of the deal. I agreed that as the customer we would cover their travel costs – it’s not exactly unusual to do so. What I didn’t do was to agree on precisely what that would involve with regard to costs. No budget, no cap to cover uncertainty, no policy, just a breezy “yes” to travel costs. Imagine my surprise, therefore, when presented with a chunky five-figure invoice for flights and hotels when I’d been expecting between a quarter and a third (tops!) of that amount. On the one hand, that’s entirely on me for my failure to be specific – in that sense, I got exactly what I deserved. On the other hand, the supplier missed the opportunity to ask during the negotiation whether their own travel policies were consistent with ours in relation to the convention of the client covering supplier travel costs. Had either of us focused fully on agreement we would have had the chance to establish whether we could have resolved a situation we’d all rather have avoided, in advance. I did resolve the situation, but it was costly and the important point was that I should not have allowed it to happen in the manner it did in the first place.

Issues that may in the context of the deal itself appear relatively small can become contentious later in this manner. An abstract or concept – who holds stock – might be easy to agree based on assumption. But it’s important not to let the closure of the deal being in sight get in the way of clarifying issues, however relatively small they may appear at the time. If it’s stock – how much? For how long? Who’ll cover the costs of delivery, insurance and other ancillary but necessary expenses? And so on. It’s far better to discover your assumptions need revisiting when you’re still working with a live deal than when the contract has been signed. At best, you may be able to trade greater value in the overall deal from understanding exactly what you’re agreeing to, where it’s important to the other party. You’ll also avoid the pernicious and almost unavoidable suspicion that the other party may have deliberately taken advantage of your assumption, if they didn’t raise the issue themselves at the time – and that will preserve the ongoing relationship. And, at the very least, you’ll avoid ending up with egg on your face.

Our advice? It’s simple – agree what you’ve agreed. And while that sounds almost laughably easy, you don’t have to scratch the surface of too many deals to see where agreement is relative or subjective, and potentially therefore not as mutual as we may believe.

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