Select Page

Negotiations
University of Toledo School of Law
Hopperton, Robert J.

1.      Steps in negation
a.       Preparation –
                                                              i.      Internal preparation – figuring out your side of the negotiation
                                                            ii.      External preparation – asses requirements and desires of the other side
                                                          iii.      Synthesis – integration of the internal and external desires into a whole
1.      Synthesis is critical because it changes the other two sometimes
b.      Information exchange/bargaining –
                                                              i.      What do you need and how are you going to get it
                                                            ii.      Disclosure of information – already have high offer on your house
                                                          iii.      Information you want to protect – house’s been on the market for 6 months and no offers
c.       Agreement proposals – what are you going to put on the table, who first?
d.      Resolution – general term
                                                              i.      Agreement
                                                            ii.      Impasse – temporary cessation of negotiations
                                                          iii.      Deadlock – ultimate break down
2.      Types of negotiations
a.       Transactional negotiation – deal making
                                                              i.      No past history, good or bad
                                                            ii.      Lease or contract
b.      Dispute resolution negotiation
                                                              i.      Parties have a controversy
c.       Combination of the first two
                                                              i.      Dispute has led to mediation because negotiation left in deadlock
                                                            ii.      Mediator can bring out deal making aspects of conflict
3.      Conceptual models – can occur within any of three types of negotiations
a.       Adversarial/problem solving –
                                                              i.      Adversarial win lose
1.      Positional and power oriented
2.      Value claiming
                                                            ii.      Problem solving – win win
1.      Cooperative
2.      Interest based
3.      Value creating
b.      Zone/allocation à hoppertons favorite
                                                              i.      Zone of agreement – determination if there is a zone of possible agreement before the parties walk away
                                                            ii.      Surplus allocation – if there is a zone of possible agreement, the parties must distribute who gets what within that zone (occurs only if there is a zone of possible agreement)
c.       Barriers to negotiation – lead to deadlock
4.      Questions
a.       Should a deal have been made on these facts?
b.      Did you leave potential gains on the table
c.       How did you allocate the surplus
                                                              i.      Power or leverage
                                                            ii.      objective/fairness
d.      what effect did this negotiation have on your relationship
                                                              i.      relationship of the parties (role play)
                                                            ii.      relationship with the classmate involved
5.      Preparations
a.       Interests
b.      Issues
c.       Alternatives – if deadlock, what am I going to do instead
d.      BATNA – never enter a negotiation unless you know what your BATNA is
e.       Resistance point – bottom line, mine and theirs
f.       Target/goal – realistic goal
g.       Planned initial position
 
 
Structure of negotiation
1.      Rational choice?
a.       Risk adverse
b.      Risk tolerant 
c.       Risk taking
2.      Goals – korobkin
a.       Determine if a bargaining zone exists (ZOPA)
b.      Change the scope of the negotiation to make the transaction more beneficial to both sides, add value
c.       Exercise negotiating power to maximize the benefit to your party
d.      Divide the benefits of the transaction in a socially acceptable way
3.      Estimating the bargaining zone – strategic goal one
a.       BATNAS and reservation prices – internal prep
                                                              i.      Reservation price – the max amount a buyer will pay, and min amount a seller will accept. There are two components
1.      Market value of the BATNA – never agree to something worse than your BATNA!
2.      The difference to the party between the value of the BATNA and the value of the subject of the negotiation
3.      Seller’s RP
a.       Calculate BATNA, then
b.      Subtract if the value of the subject of the negotiation is more than the BATNA, or
c.       Add if the value is less
4.      Buyer’s RP
a.       Calculate BATNA, then
b.      Add if the subject is more valuable, or
c.       Subtract if less
                                                            ii.      Bargaining zone – overlap between those
                                                          iii.      Alternatives and BATNAS
1.      Asses other options –
2.      Determine which alternative is most desirable – BATNA
b.      External prep
                                                              i.      Try to

                         ii.      Hereford
1.      Alternative – trial, settle
2.      BATNA – dismissal =
a.       WATNA – trial and amy gets
3.      Reservation price – anything less than 10 which is the cost of litigation
                                                          iii.      Bargaining zone becomes 10K
c.       Venture capitalist
                                                              i.      BATNA – G or O COULD BE worth about 2 mil
                                                            ii.      RP – O is almost a sure thing at 1 mil
d.      Malpractice
                                                              i.      I would suggest that the reservation price be higher, because the Chicago suits average was 90K, and this suit is a Chicago one. 
e.       Shoplifting charge
                                                              i.      Jail time would be my reservation point, if the Da did not offer only probation I would go to trial
f.       Time value
                                                              i.      Instance one – I would accept no less that 50K plus the interest lost on the money and the deprecation in value of the money over time
                                                            ii.      If the client needed the $ and were risk adverse I would accept less than 50 k in order to get him the money and guarantee a return
g.       Role
                                                              i.      I think the aggressive aspiration would yield the best result as the benchmanrk would be set high and negotiations would center around that number if offered first
h.      Costs
                                                              i.      I think that a set of aspirations under different circunmstances would be best. For instance…if they are willing to give up X, I would like Y dollars. But if they wont give me X, I wont take less than Z which is more than Y. (intrinsic value of X being the difference)
i.        Setting aspirations
 
Notes on Bullard houses
·         Challenging prep and negotiation
·         Patience is important
·         Lawyer to lawyer guarantees of confidentiality of sensitive info violate state rules and duty to rep in good faith