How To Get Yourself Out Of A Bad Deal

As negotiators, sometimes we get handed a bad apple
As negotiators, sometimes we get handed a bad apple

Image Credit: C-Monster

You might think that every principled negotiation starts out the same way: with a blank sheet of paper. However, in a number of situations that I’ve found myself in this is not the case. Instead, what has happened is that for whatever reason because of the negotiation styles and negotiating techniques being used, my client allowed themselves to get sucked into signing a bad deal. Now they find themselves living with a deal that is not in their best interests and they want to have it changed. Enter the (re) negotiator. What’s the best way to turn a bad deal into a better deal?

Making Things Better

Ok, so there you are and you’ve got a bad deal that is weighing you down. What’s the first thing that you can do? I would tell you that what you are going to want to do is to get in contact with the other side of the deal and let them know that you know that it’s a bad deal for you. What you will want to do is to bring the inequities in the existing deal to the other party’s attention and ask for a renegotiation. If they have the better part of a deal, then you might ask yourself why would they listen to your complaint? Since most people have an innate desire to be fair, the other party might be willing to reopen a discussion before the end of your contract period. This would be especially true if you backup your request with convincing evidence.

This, of course, brings up the question of what can you do if the other side informs you that they are not willing to renegotiate the deal that they got the best out of. You have a number of options at this point in time. Some people would say it’s now time to threaten the other side with a lawsuit. However, this is only an option if you believe you can make a strong case. As a negotiator you need to keep in mind that launching a lawsuit could escalate a situation that might be resolved more efficiently, cheaply, and peacefully. Something else that you might do that could get the other side’s attention would be to withhold any payments that you owe them as a part of the deal. You’d be amazed at how quickly this might cause the other side to be willing to sit down at the negotiating table with you once again.

When it comes to attempting to change a bad deal into a better deal, you need to go into the negotiations with a set of realistic expectations. Look, your customer is currently in a bad place. Any improvements that you can get the other side to agree to will make things better for your customer. No, you are probably not going to be able to renegotiate a completely new deal, but perhaps you might be able to get rid of some of the most damaging pieces of the existing contract. These renegotiations generally do not move quickly. You are going to have to expect to spend a considerable amount of time trying to find ways to change the existing deal that will be acceptable to both sides of the table.

How To Prevent A Bad Deal From Happening In The First Place

If you can understand just how hard it is to make changes to a bad deal, this should provide everyone with the motivation to attempt to avoid getting into these types of situations in the first place. Now the big question is how to go about doing this. One of the first things that you should do is to build breaks into any contract. Look, things like economic and other conditions will change over time – nobody can predict them. This means that you don’t want your customer to enter into any lengthy contract. Instead, make the contract shorter and allow natural breaks for renegotiation. What this will allow your customer to do is to negotiate adjustments as necessary, and seek out other bidders in the event of non agreement.

You don’t have to be a negotiator for very long to realize that there will always be disputes involved in any deal that is put together. No matter how long (or short) the deal is, disputes and differences of opinion will inevitably arise. What this means for you is that you are going to want to add a clause to your contract that requires renegotiation, mediation, or arbitration in the event that parties end up disagreeing about the terms of the contract or how the partnership should unfold. This will be a safety measure that provides both sides with an “out” in the event that they reach a point where nobody is seeing things eye-to-eye.

Finally, you are going to want to avoid quick fixes. All too often a deal that is being negotiated can look like an attractive quick solution to a pressing problem that your customer is dealing with. In the middle of a high-stress business situation, it can be all too easy for a customer to grab onto a quick fix. As we all know, short-term thinking can lead to long-term problems. As a negotiator, you are going to want to make sure that you avoid making this mistake. What you are going to want to do is to include disinterested parties in the decision-making process and encourage them to question your judgment.

What All Of This Means For You

It would be a perfect world that we lived in if every time we sat down to negotiate a deal we were dealing with a blank sheet of paper that we could fill out any way that we wanted to. However, every once in a while we’ll find ourselves in a situation where our customer has entered into a bad deal and wants to get it changed. Now things can get tricky.

The very first thing that you are going to want to do if you find yourself in this situation is to bring the inequities in the existing deal to the other party’s attention. Once you do this, they may agree to renegotiate or they may push back. If they push back, you have the choice of taking them to court or perhaps halting performing your part of the existing deal. Make sure that you don’t fool yourself: you are not going to be able to turn a bad deal into a great deal. The best that you can do is to make it not quite as bad. In order to prevent this situation from happening in the first place, you will want to make sure that any deal that you negotiate has breaks built into it. You’ll also want to understand that disputes happen and the deal needs to have a way to deal with those. Finally, make sure that your customer does not use a bad deal to create a quick fix for a problem that they are currently facing.

Bad deals happen and sometimes they get placed in our laps. When this happens, we need to understand what we are going to be able to both do and not do about it. We may be able to make a bad deal better, but we probably won’t be able to make it great. However, we can take steps when we are negotiating to make sure that we don’t create bad deals that we’ll have to deal with in the future.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: If your customer has a bad deal, do you think that you should ever advise them to just walk away from it?

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What We’ll Be Talking About Next Time

So first off let’s all agree on something: I don’t really care if you love or hate President Donald Trump. That’s not what I’m talking about. Instead, considering that he’s in a very powerful position in which he gets to talk to world leaders on a daily basis, I’m interested in how good of a negotiator he is. He did write / co-author a book on negotiating and so you’d think that he’d be pretty good at this stuff. Let’s take a look and see what techniques he has been using as a part of his presidency so far.