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Handling a threat during contract negotiations

On Behalf of | Apr 12, 2024 | Contracts |

Good negotiating skills are essential when you own and run a business. Much of your business depends on having good contracts, and getting good contracts requires strong negotiating ability.

Good faith in contract negotiations

Contract negotiations should always be done in good faith. Both parties obviously want to receive the best deal and give up the least amount possible, but using threats or coercion to achieve this goal can have many negative repercussions.

Not only do you risk destroying a potentially lucrative, long-term business relationship, but you also risk the contract being declared void because if it was entered into because of a threat.

But what happens if you are the recipient of the threat? What if contract negotiations go bad because you believe the other party is threatening you?

Take a step back

Before you do anything, determine if what you experienced was a valid threat. Reflect on what exactly was said and analyze it objectively.

Determine if the threat is legitimate or if the other side is simply trying to intimidate you. Sometimes people resort to threats when they know they are losing or do not have a solid position. In this case, it is best to ignore the threat and move on.

Remember that the situation is personal to you, so try to put yourself in the position of a neutral observer. Perhaps the other side did not intend it to be a threat but you took it that way because of your personal involvement in the situation.

Ask questions and do not threaten back

If it was a valid threat, resist your natural impulse to immediately fire back with your own threat or give in to the threat just to avoid an unpleasant situation.

Although it can be difficult, try empathizing with the other side and see the situation from their perspective. After that, start asking questions. Figure out what they want and focus the conversation on how you can help them achieve their goal.