Phases of negotiation, qualities of a negotiator and power to negotiate

Alternative Dispute Resolution Systems · Unit IV · Topic 15 of 18 · 4 min read

The phases of a negotiation from preparation to closing, the qualities of a good negotiator, the sources of bargaining power, and a lawyer's authority to negotiate and compromise on behalf of a client under Order XXIII Rule 3 CPC and Byram Pestonji Gariwala.

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On this page

1. Who is a negotiator
2. Phases of negotiation
3. Qualities of a negotiator
4. Power to negotiate: bargaining power
5. Power to negotiate: legal authority
How this is examined

Cases checked to exist. Read the judgment before quoting a holding.

Every case cited here has been checked to exist — the citation resolves and names the right parties. The propositions attributed to each case have not been verified line by line against the judgment. Case names link through to the full judgment: read it before quoting a holding in an examination answer, and never carry a proposition from notes into court on trust.

Most negotiations are won or lost before the first meeting. Preparation (knowing your client's interests, your BATNA and the other side's likely position) is the phase students leave out, and the one examiners reward. “Power to negotiate” in the syllabus has two meanings, bargaining strength and legal authority, and a good answer covers both.

1. Who is a negotiator

A negotiator is a person who conducts a negotiation, either for himself or on behalf of another: a party, an advocate, an agent, a trade union leader, a diplomat. A lawyer negotiating for a client acts as an agent and is bound by the limits of his authority and by professional ethics.

2. Phases of negotiation

Preparation and planning. Gather facts and documents; identify the client's interests and priorities; fix the target and the reservation point; work out the BATNA and estimate the other side's; anticipate their arguments; decide on the opening offer, the concessions you can make and the order in which you will make them; obtain the client's instructions and authority in writing.
Opening (introduction and climate-setting). Meet, agree on the agenda and ground rules, set a constructive tone, and make opening statements. The first offer often anchors the discussion.
Exploration (exchange of information). Ask open questions, listen, find out the other side's interests and constraints, test assumptions, and reveal selectively.
Bargaining. Exchange proposals and counter-proposals; trade concessions (“if you do X, we will do Y”); package issues; use objective criteria to justify positions; deal with deadlock by a break, a change of negotiator or a neutral.
Closing and commitment. Summarise the points agreed, resolve the last issues, and reduce the agreement to writing with precise terms on payment, time, default and dispute resolution. If a suit is pending, file the compromise under Order XXIII Rule 3 CPC.
Implementation and review. Monitor performance; a well-drafted agreement provides what happens on breach.

Some texts group these as three phases (pre-negotiation, negotiation proper and post-negotiation) or as four (preparation, opening, bargaining, closing). Any of these schemes is acceptable if each phase is explained.

3. Qualities of a negotiator

Preparation and knowledge of facts, law and the client's business.
Listening and questioning skills: most information comes from the other side.
Clear communication, oral and written.
Patience and self-control; not reacting to provocation.
Empathy: understanding the other side's interests without adopting them.
Creativity in devising options.
Assertiveness: firmness on essentials while being flexible on details.
Integrity and credibility: a negotiator who is caught misrepresenting loses all bargaining power, and a settlement procured by fraud or misrepresentation is voidable (sections 17, 18 and 19 of the Indian Contract Act, 1872).
Judgement about when to concede, when to hold, and when to walk away.
Cultural awareness in cross-border and inter-community negotiations.

4. Power to negotiate: bargaining power

Power in negotiation is the ability to influence the other side's decision. Its sources:

BATNA: the better your alternative, the less you need the deal.
Information: about facts, the law, the other side's needs and deadlines.
Legitimacy: legal rights, precedent, objective standards, a strong case on merits.
Resources: money and time to litigate; the weaker party often settles for less.
Relationships and reputation.
Commitment: a public or binding commitment that limits one's own options.
Time pressure on the other side.

Power imbalance is the main ethical concern in negotiation. A lawyer should not exploit a weaker party by deception or coercion; such an agreement may be avoided for coercion or undue influence (sections 15 and 16 of the Contract Act), and courts will not record a compromise that is unlawful (Order XXIII Rule 3).

5. Power to negotiate: legal authority

An agent can bind his principal only within his actual or ostensible authority (sections 186 to 188 and 237 of the Indian Contract Act). A negotiator should know, and if necessary disclose, the limits of his authority.
Advocates. In Byram Pestonji Gariwala v. Union Bank of India, 1991 INSC 245, (1992) 1 SCC 31, the Court held that after the 1976 amendment to Order XXIII Rule 3 CPC, which requires the agreement or compromise to be “in writing and signed by the parties”, a compromise signed by counsel on the party's behalf, within the authority given to him, can still be recorded. The amendment did not take away counsel's authority to compromise on behalf of the client. In practice an advocate should act only on the client's clear instructions, preferably in writing.
Officers of companies and government bodies need authority under the board resolution or the rules of business; a settlement beyond authority may not bind the body.

Trap. “Power to negotiate” also covers legal authority. Mention it: a brilliant settlement negotiated by someone with no authority to bind the client is worthless.

How this is examined

“Who is a negotiator? Examine the phases of negotiation” (December 2018) and “Qualities of a negotiator” (short note, June 2019) are the usual forms. Explain each phase with what the negotiator does in it, then list qualities with a line on why each matters. Close with power, in both senses, citing Order XXIII Rule 3 and Byram Pestonji Gariwala.

Now try the real questions: Alternative Dispute Resolution Systems past question papers.