1. 2018 Contract Negotiations Competition
Chairs: Charles King & Ryan Palardy
Committee: Christina Jaccard, Tyler Grandgeorge, Vanessa James, Marten King, & Evan Boeshans

2. OVERVIEW Format Negotiation Context Strategies and Practice Tips
Negotiation Process
Writing Component

3. Format Each team will receive BEFORE the round:
General information about the problem
Confidential information for their side
Oral Negotiation Format: Teams will negotiate for 1 hour per round. You may bring flip charts, white boards, blackboards or proposed Term Sheets.
Breaks: Each team gets one (1) 5-minute break to have a private conversation with your teammate.

4. Preparation Understand the context of the negotiation
Dispute or Transaction?
Single Issue or Multiple Issues?
Ongoing Relationship?

5. Negotiation Context Distributive Context
Single item/issue being negotiated
Parties’ interests are oppositional Negotiators stake out positions
Task is dividing the fixed resource, e.g., $$
Every dollar gained is an equivalent dollar loss to the other negotiator (zero-sum)
Integrative Context
Multiple items/issues
Creative options for resolution
Mutual gains possible (bargain on the deal)
Future relationship involved or possible
Applies to most contract negotiations

6. Negotiation Strategy Informed by:
Context
Negotiator Personality
External Constraints (time, client goals & instructions)
E.G. collaborative, competing, compromising
Scoresheets weigh in favor of less hostile strategies; use competitive strategies carefully, with purpose; remember context
PRO TIP
Convert a distributive to an integrative context by finding a additional issues to bargain over

7. Collaborative Strategy
Bargain based on needs
“The reason that is important to me is …”
Exchange Information
Focus on interest, preferences, and goals
Identify trade off
They care about x more than we do, and we care about y more than they do, etc.
Make pie bigger
Don’t be afraid to bargain on the deal

8. “Getting to Yes” Putting Getting to Yes to work
1. Separate the people from the problem
2. Focus on interests, not positions
3. Invent options for mutual gain
4. Insist on objective criteria
5. Know your BATNA

9. Separate the people from the problem
Build Relationship
Integrative bargaining cannot occur if each party is trying to win at the expense of the other
Only by working together can parties come up with the best possible solution
Efficient/Clear Communication
Be willing to reveal your interests and preferences (Tactfully)
***There may be some information you want to protect
Listen carefully to understand opponent’s interests and preferences

10. Know your BATNA BATNA Best Alternative to a Negotiated Agreement
The best alternative available to you if you do not settle
DO NOT commit to an agreement unless it is better than your BATNA

11. Steps of Negotiating Before During Preparation Process Agreement
Information Exchange
Bargaining
Resolution
Suggested... Not written in stone

12. Preparation Before the negotiation Prep Sheet planning
Essential for:
Setting negotiation goals
Selecting appropriate strategy and tactics
Negotiating with confidence
Strongest indicator of negotiation success
Should be no less than preparing for trial
Review Negotiation Prep Sheet
Parties & Stakeholders
Client’s Goals
Negotiation Issues
Alternatives
Information planning
Interests & options
Distributive issue
Before the negotiation
Prep Sheet planning
Their information – what do you need
Your information – share
Openly
Guardedly
Never

13. Information Exchange
Establishing good rapport is essential for creating most productive negotiation climate
Importance of “small talk”***
Develops a relationship
Creates trust which will be needed later
Allows you to find out who you are dealing with
Test your assumptions or stereotypes
Gives you hints of his/her likely negotiation strategy and tactics
Helps you decide how much information to share

14. Bargaining Negotiate the process first
Agree on a plan for an orderly discussion
Discussion
Making Offers & Proposals
First offers made by both sides
PRO TIP – making the first offer (“Anchoring”) may be a good strategy, but holding off can be effective as well; keep in mind time constraints
Followed by a series of exchanged proposals
Identifying and overcoming barriers to settlement
High vs reasonable offers

15. Decision Making Reaching agreement
Restate the final terms to confirm agreement
Consider negotiation a bit more to “sweeten” the deal
“Bargain on the deal” / “deal on the bargain”
Formalize Agreement
Memo of Understanding***
Offer to draft the agreement
Agreement needs to be:
Clear
Comprehensive
Durable

16. Decision Making Impasse Restate final proposals
Confirm lack of agreement
Identify barriers to settlement
More information needed?
Greater authority needed?
Go to your BATNA, hopefully not your WATNA
Identify next steps, if any

17. Review of Agreement Process is not always linear
While finalizing agreement in the resolution stage, a new issue may arise, requiring more information exchange and bargaining
Memorialize what you can agree on

18. Final Tips “Winning” not everything: Outcome Advancing Client’s Goals
Effective Communication
Planning & Flexible Strategy
Teamwork

19. Writing Credit
Each 2L/3L competitor may write two term sheets and an operative provision.
2 Term Sheets (from any night your team competed in; only one per night)
1 Operative Provision

20. What is a Term Sheet?
Sets out the key terms of a transaction agreed on in principle by the parties
There is no such thing as a typical term sheet, but they generally have:
A basic description of the transaction and its structure
The principal deal terms
Key dates (if applicable)
A statement whether the term sheet is binding or non- binding
Confidentiality provisions, if there is no separate confidentially agreement

21. Operative Provision What is are “Operative Provisions”?
The body of the contract—provisions that contain the key terms governing the rights and obligations of the parties
Example: Lease Agreement
Paying Rent
Assignment and Subletting
Repairs and Maintenance

22. Resources
Bloomberg
Practical Law (Westlaw)
Google/free resources

23. Questions?