The EndgameWINNING WAYS TO CLOSE ALMOST ANY DEAL
You’ve been negotiating for months to buy out your partner, but the two of you just can’t seem to close the deal. The sticking point is a festering disagreement over the value of a vacant lot that you bought together six years ago just before the real estate market collapsed. On top of that, your spouse has been haggling with a contractor about remodeling the kitchen, but he simply won’t commit to a firm start date. In too many negotiations—whether between Republicans and Democrats over taxes or NBA team owners and players over compensation—a successful close to the deal proves elusive.
Just as negotiators must have the right opening moves (as I discussed in my Winter 2011 column), they also need a proper endgame. Based on experience from international diplomacy, here are four methods that can help you close a deal.
Set a deadline. Nothing focuses negotiators’ efforts like a fixed time limit. Without a deadline, the other side is tempted to use delay to pressure you and to avoid making hard choices needed to reach agreement. The Uruguay Round, a set of trade negotiations among 123 nations, began in 1986 and dragged on for seven years without result. In 1993, as the U.S. government’s negotiating authority from Congress was about to expire, the conference leadership set deadlines to drive through agreements. They reminded the delegates that the opportunity to negotiate new international trade rules would soon vanish, perhaps forever.
The tactic worked—ultimately leading to a radical change in the world’s trade regime. So the next time you set out to buy a new car, tell the salesperson you have only an hour before you have to get back to work. You’d be surprised how quickly you can get the price down.
Kick the can down the road. In some negotiations, not all issues have to be decided immediately in order to reach an agreement. If you want to close the deal before the end of the tax year, you and you partner might agree on the purchase of all assets except for the vacant lot—which will require a separate negotiation, to be completed by a specific date. Generally, it’s better to kick marginal, rather than essential issues, down the road. The 1993 Oslo Agreement between Israel and the Palestinians is a cautionary example. While recognizing the Palestinian right to self-government, the accord left undecided all of the principal issues in dispute, including boundaries, the status of Jerusalem, and the Palestinian right to return to their previous homes. Twenty years later, the two sides are still chasing those cans.
Invite a friend. The intervention of an influential third person can often move things along. The former senator George Mitchell’s mediation in talks between Catholic and Protestant warring parties in Northern Ireland was crucial in bringing peace to that troubled land. A third person often has important resources, skills, and networks that can help the parties close their deal. If you and your partner have a trusted lawyer, consultant, or friend, ask your partner whether that person’s presence might help the negotiation.
Ask an expert. Negotiators stymied by a difficult technical issue can sometimes refer the issue to another person for a decision or a recommendation. In the 1979 Camp David negotiations between Egypt and Israel, for example, a final stumbling block was the status of Taba, a piece of land in the Sinai Peninsula to which both countries made historical claims. Instead of trying to thrash out the issue at the negotiating table—an exercise that would have delayed a peace settlement indefinitely—both sides agreed to sign the treaty but to refer the Taba matter to a tribunal of international lawyers. The 1995 Dayton Accords ending the Balkan War adopted a similar solution to settle disputed boundaries. In your buyout bid, you and your partner might agree to submit the valuation of the vacant lot to an expert appraiser.
Although closing a deal may give you momentary satisfaction, remember that the purpose of your negotiation is not just reaching agreement but securing desired behavior from the other side. Closing a deal is only Phase I of the endgame. Phase II, often the more difficult, is implementing what you have agreed. But that subject is for a future column.
JESWALD W. SALACUSE is the Henry J. Braker Professor of Law and former dean of the Fletcher School at Tufts. His most recent book is The Law of Investment Treaties (Oxford University Press).