Excuses I have heard, or How to Derail Negotiations

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If you want to make a deal, then you’ve got to deal. You’ve got to trade. Yes, it requires give and take. You’ve got to satisfy the other side’s legitimate needs and concerns. That’s why I’ve never understood any of the negotiating responses listed below. Some can be countered with the question, “why.” Others are just negotiation enders or merely the start of a detour about process, not substance. Even the ones that naturally lead to a “why” response are sidetracking frustrations. They wouldn’t be such if the speaker continued with “because.” After all, how can you satisfy someone’s legitimate needs or concerns if they haven’t expressed them?

Here is a working list, AND a strong invitation from Ruminations – a Retail Real Estate Law Blog to subscribers and all other readers for additions to the list. As with comments, they can be sent to www.retailrealestatelaw.com.

• The bank won’t let us do that.

• You can’t get that in an insurance policy.

• That’s our standard form.

• No one ever has raised that objection before.

• We’ve never done that before.

• Our client (or, the owner) won’t agree.

• We don’t have that in any of our leases.

• It can’t be done.

• I’ve never heard of that.

• You don’t know what you’re talking about.

• That’s not possible.

These do not move the ball forward. What we need instead, are reasoned responses.

Why do people make deals? Ruminations thinks because they want to exchange something they hold in lower regard for something they hold in higher regard at that point in time. Here’s a very simple example. A buyer has a dollar bill and she wants her dollar bill less than she wants that ice cream cone owned by the seller. The story might be different in the middle of the winter than in the middle of the summer. In the context of Retail Real Estate, a property owner may want that $20 million bank check more than it wants the property, and the buyer with the $20 million may value that money less than it covets the property.

Now, it isn’t always that clear that each negotiating party is “quite” ready to make the deal. Perhaps the $20 million needs a little enhancement; whether that is a small increase in amount or a little more certainty (such as fewer contingencies before it gets paid). Perhaps the property needs a little “extra,” such as a reallocation of some risks or a little extra investigation. The reader can think of her or his own examples when it comes to leases, loans or any other kind of “deal.” To be able to craft such enhancements, something more than “we’ve never done that before” would sure be helpful.

Again, please send your suggested additions to the list as well as your comments (even barbs) to www.retailrealestatelaw.com.

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Comments

  1. A lot of that is lawyer-speak for “That is a fair request, however, that concession would allocate risk to my client that he does not wish to bear, and since you have the weaker bargaining power we will not agree to your request.”

  2. Jack Levey says:

    I agree with Moshe, and would change “risk” to “risk, cost or both”.

    My favorite response to “No one ever has raised that objection before” is still the one that a mentor suggested to me nearly 30 years ago: ” Well, you won’t be able to say that tomorrow, will you?”

  3. “You agreed to this term in the [Name of Shopping Center] lease, so it should be acceptable for this site.”

  4. I love Jack’s mentor’s answer and will try to recall it for future use. My personal pet peeve, which is along similar lines, is “we always / never do it that way”, generally from a less experienced colleague who is completely unable to explain why that should be the case. I generally simply ask “why not” and if they cannot come up with a valid objection, then I explain why it makes sense for my client and if they cannot identify a downside then there is no reason for them not to accomodate us. If we only ever do what has been done before and follow standard forms, then we become mere technicians as opposed to creative problem solvers, which I find the most interesting part of our practice.

  5. Another good one, Ira and I agree with the other commenters’ posts as well. To #1, that is often just balderdash, invented by the lawyer. He/she doesn’t really know whether that’s true unless they ask. If the bank even looks at the lease, they likely won’t care.

    #2 I leave to your expertise, Ira.

    #3 I love this one. This is the most revealing that the other side feels insecure because it doesn’t know what to do with the opposing counsel’s comment, or is just plain inflexible. Does the phrase “standard lease form” lend any weight or legitimacy to the lease form, which was written by the landlord [or tenant] with a heavily landlord [or tenant] oriented content? My standard response to that is: “Well, these are my ‘standard comments’ to your ‘standard lease form,’ so lets discuss them and work things out.”

    #’s 4, 5, 7 and 9 appear to be variations of the same thing. That is an “unproductive” (to be polite) dismissal of the other side’s legitimate concerns. The fact that the party of the first part has not heard of the comment before or has not agreed to it before is meaningless. That simply shows that they were under-challenged in the past or made the other side back down. There is always a first time. Judge it by the quality of the comment and have constructive dialog about it.

    #8 & 11 reflect an inability to think outside of the box.

    #10 what can I say ? It is simply disrespectful.

    #6 – is the only one closer to reality because it may be true. But the lawyer really doesn’t know that unless the client is consulted. The client should be in the conversation so that it can hear the explanation from the other side, without being shielded by the bias of its own counsel.

  6. A variation of Jack Levey’s mentor’s sage advice. When a lawyer says that “we’ll NEVER agree to that”, my response is “unless of course you do”.

    Moshe: Your risk allocation analysis definitely takes the high road but to get there I think one has to go through the following process: “Well, let’s have the clients discuss this.” Then you report back to your client. He says, “Why won’t they agree?” Then the two principals talk to one another and the rationale of each is explained to the other and I can assure you that they will not use 9 out of the 11 statements Ira quoted. If one party won’t budge after that exchange, the other party can make an informed decision of whether to assume the risk in question.

  7. A brazen variation of Moshe’s comment that I’ve heard was: “Because we can, and if you want the deal you’ll have to live with it.” Or, “We hold this clause near and dear to us and won’t ever per it any modifications.” So frustrating, to say the least.

  8. Recently, I heard this from the contracting agent for a major Oil distributor: ” We never have had a servicing subcontractor request changes to our contract”.

  9. Maybe I’m feeling a bit contrary today, but I would like to take up in defense of some of your excuses. For example, if I know, because I have already discussed the issue with my client, that they will not agree to a particular change, I believe that it is informative to tell the other side that my client simply will not agree, so let’s not waste our client’s money talking about it. This can explain a few of your “excuses” and should be thought of more as explanations, albeit incomplete. Maybe part of what bothers is people is the lack of a reason. But what does it matter if the client will not change its mind? I also want to take up in defense of “You don’t know what you’re talking about”. Maybe because I work on markets of all sizes across the country, there are definitely times when the other side really doesn’t know what they’re talking about and are completely out of touch with reality. (For example, a tenant being represented by a non-real estate attorney with no broker involved, or no attorney at all.) In those cases I will explain like a professor, but sometimes the other side has deaf ears.

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