Conflict Negotiation Skills for Broken Contracts

Conflict negotiation skills are needed more than ever during the Covid-19 pandemic, as parties argue over broken contracts. Before threatening to walk away or sue, consider an interest-based approach.

By — on / Conflict Resolution

conflict negotiation skills

Amid the Covid-19 pandemic, many agreements—renting a concert venue, hiring workers for a new café chain, acquiring a company—became untenable or illogical overnight. But it’s not easy to exit a signed contract without risking a costly legal dispute. By sharpening our conflict negotiation skills, we can negotiate satisfactory solutions without ending up in court. One key conflict resolution strategy involves looking at our disagreements more deeply by exploring parties’ interests.

Power, Rights, and Interests

When considering strategies to resolve conflict, people tend to focus on either power, rights, or interests, write William L. Ury, Jeanne M. Brett, and Stephen B. Goldberg in Getting Disputes Resolved: Designing Systems to Cut the Costs of Conflict (PON Books, 1993).

  1. A focus on power involves trying to coerce another party to do something they wouldn’t otherwise do, perhaps by imposing costs or threatening to do so.
  2. A focus on rights might mean basing decisions on a law, rule, or socially accepted standard such as reciprocity, precedent, equality, or seniority. Disputes argued on the level of rights are often resolved by a third party, such as an arbitrator or a judge.
  3. A focus on interests can involve resolving a dispute by discussing parties’ underlying interests—their needs, desires, concerns, and fears—and devising creative solutions for meeting them.
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Asserting Rights and Power

Your efforts to exit a contract are likely to vary widely depending on whether your conflict negotiation skills rely on power, rights, or interests.

Turning to real-life conflict scenarios, consider a dispute that a childcare center in Israel faced in mid-March after closing to help slow the spread of the coronavirus. A group of parents demanded that the center refund payments for the rest of March and for April. The parents insisted the law entitled them to money paid for services they would not receive. But the center’s owners needed to pay rent, taxes, insurance, and wages. If they returned the money, they likely would go out of business.

The parents used a rights-based argument that could lead to a lawsuit decided by a judge. A different group of parents might have used a more power-based argument, threatening to withdraw their children from the center permanently if they didn’t get refunds.

The Benefits of Exploring Interests

Exerting your rights or power tends to escalate disputes. If the other side doesn’t bow to your threat or demands, you may find yourself in a tough financial or legal situation. Even if you do get your way, will you be happy with the outcome? If the childcare center refunded the money and went out of business, the parents would eventually have to find new childcare. If the center survived, would these parents want to entrust their children with people they antagonized?

By considering the situation more deeply, the parents might recognize that they had a long-term interest in keeping the center afloat. Probing the owners about their interests, they would have discovered that there was a real risk their demand could put the center out of business.

Equipped with this information, the parents then could have tried to negotiate an agreement that met both sides’ long-term interests. They might have agreed the center could apply previous payments to the first month of reopening or use the funds to stay afloat through the crisis and give the parents a discount upon reopening, for example. The center might have offered to keep kids occupied online while parents worked; qualified parents might have offered the center financial or marketing advice. Competition could give way to cooperation and mutual gains.

Exploring Long-Term Interests

An interest-based conflict resolution strategy tends to generate greater satisfaction and better working relationships, and is often less expensive, according to Ury, Brett, and Goldberg. So, why do negotiators tend to overlook interests?

A lack of critical thinking may be to blame, theorize Hebrew University of Jerusalem law professor Netta Barak-Corren and Harvard Business School professor Max Bazerman. When we’re feeling angry and wronged, power-based threats and rights-based lawsuits spring to mind. Often, these approaches are aimed at meeting our immediate needs. When we take time to think before reacting, we become capable of considering long-term interests at stake, Barak-Corren and Bazerman believe.

Negotiators who explore one another’s interests reach more mutually profitable agreements than those who focus on competing. When you’re unhappy with a contract, your conflict-negotiation skills should include exploring your long-term interests and those of the other party.

What other conflict-negotiation skills have you found useful when dealing with broken contracts?

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