How to Recognize and Avoid Bad Faith Negotiation Tactics

No matter what you are negotiating – be it a lease, settlement, commercial or vendor contract – there is a lot at stake during this tedious process. What only makes matters worse is that you have no guarantee that the other party is being 100% legitimate. Sure, you may have done research and vetted the deal, but when someone wants to employ bad faith tactics, such precautions may fail to adequately protect you.

To help you better understand what is meant by bad faith tactics and how to avoid them, let’s spend the rest of this brief post discussing some common bad faith tactics you may be likely to encounter.

Common Bad Faith Negotiation Tactics to Avoid

Making Last-minute Demands

Once you’ve come to an agreement and are finalizing material terms these should be fixed and not subject to change. Be wary of anyone who wants to ask for additional concessions without having any good reason or offering anything additional. Don’t feel pressured because you think a deal is close.

Entering into negotiations without intending to reach an agreement

This may not be obvious at first, but some parties may seek to enter into an interview with you in order to gain information or insight into your business secrets or other matters without ever having any real intent of coming to an agreement. If you do not have a confidentiality agreement in place to protect your confidential and proprietary information, you should do so prior to any disclosure of this information. Any time you encounter a party who keeps asking for delay after delay and asks questions without conducting their own due diligence, be wary. Additionally, make sure you are dealing with someone who has the authority to negotiate on the behalf of the entity they represent before revealing anything confidential.

The hiding of material facts of significance

Hiding significant material facts during the negotiation process in order to gain a privileged position during the negotiations, may be beyond bad faith and be fraudulent behavior. One way to help protect against this is to have your business attorney include a provision within the contract that specifies an agreed upon remedy should it become evident material representations made during negotiations were false. Your attorney will typically include representations and warranties appropriate to the transaction in the draft agreement, but you may also get a sense of the veracity of the statements made, during negotiations.

In Conclusion

Ultimately, you’ll need to be cautious when entering any negotiation – no matter if you know the party or trust them. It’s always better to halt negotiations than agree to something you’ll regret later. The wisest course of action is to have a competent contracts attorney with you during the process. But there are many more things a business attorney can do besides just this. If you have any additional questions about business negotiations or wish to discuss other related legal issues, call Stephen Rizzieri at 214.434.1017 or fill out the form on our site today.

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Whether you are solving complex transactions, negotiating a contract, operating an on-going business, resolving a personal conflict, forming a corporate entity, or have questions about governance or need help resolving a business, family, or personal dispute without going to trial, you can expect responsive, cost efficient attention with personal service.

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