Legal Definitions - negotiation

Negotiation refers to the process where two or more parties engage in discussions and bargaining to reach a mutually acceptable agreement, especially when there is a difference in interests, a dispute, or a need to define terms for a future arrangement.

This process involves communication, proposing terms, making counter-proposals, and often involves compromise from all sides, with the ultimate goal of achieving a resolution or a binding understanding without the need for a third-party decision-maker like a judge.

• Example 1: Purchasing a Home

  When a prospective buyer finds a house they wish to purchase, they typically make an offer to the seller. This offer includes not only the price but also other conditions, such as the closing date, contingencies for inspection or financing, and what fixtures are included. The seller might then make a counter-offer, suggesting a higher price or different terms. The buyer and seller, often through their real estate agents, go back and forth, discussing and adjusting these elements until they agree on all the details of the sale. This entire back-and-forth discussion and adjustment of terms is a clear example of negotiation.

• Example 2: Resolving a Workplace Dispute

  Imagine two colleagues who have a disagreement about how to allocate tasks on a shared project, leading to tension and inefficiency. Instead of involving their manager immediately, they decide to sit down and discuss their perspectives. One colleague might propose taking on more of the research, while the other suggests handling the presentation design. They discuss their strengths, workloads, and preferences, making concessions and finding common ground until they agree on a new task distribution that satisfies both of them and allows the project to move forward smoothly. This direct discussion to resolve their conflict and establish new terms for collaboration is a form of negotiation.

• Example 3: Securing a Business Contract

  A small software development company is bidding on a project to create a new mobile application for a larger client. The client initially proposes a fixed budget and a tight deadline. The software company, after reviewing the project scope, believes the budget is too low for the complexity involved and the deadline is unrealistic. Representatives from both companies then meet to discuss. The software company might propose a slightly higher budget in exchange for delivering certain advanced features, or suggest a phased approach to the project to meet a partial deadline while extending the overall timeline. Through these discussions, they work to find a middle ground that ensures the client gets a quality product and the software company can complete the work profitably and effectively. This process of discussing, proposing, and agreeing upon the terms of the service agreement is a prime example of negotiation.