Last week one of my team was negotiating with a lawyer from a big London firm. The discussion turned to the liability provisions, and the opposing lawyer expressed himself to be unhappy with the exclusion of direct loss of profit, goodwill etc.
His reason? “We can’t accept that, because it excludes losses that we would be able to recover at common law”. Well yes, it’s an exclusion clause – if it only covered the losses that you couldn’t recover anyway, it wouldn’t be excluding very much, would it?
I wondered if other lawyers experience this kind of negotiation fail, so I put the call out on Twitter. Here’s the top 10 (least) favourite non-arguments:
1. “It’s our policy”. Or to put it another way, “I have no authority to negotiate this contract”. Fine, please can I talk to someone who does?
2. “All of our other clients signed it”. Great, all of your other clients are idiots. I’m not, so would you mind trying a bit harder?
3. “If you value the relationship you’ll agree to it”. Wow, you’re threatening me now? Classy.
See also “You should agree this in the spirit of partnership”. And for ‘partnership’, read ‘doing what we tell you’.
4. “If the clause doesn’t apply then you won’t mind leaving it in”. Right, now I’m really suspicious. You obviously think it does apply, so please, just come clean and tell me what you think it means.
5. “I’m really angry that you raised this”. Oh, get over yourself. It’s a negotiation, people raise issues. THAT’S THE WHOLE POINT.
6. “We’ll accept X, if you give us Y”. Simples. You know we’re not bartering with beads, right?
7. “Trust us”. Hmmm… If I could trust you, we wouldn’t need a contract, would we? [I’ve covered this one elsewhere]
8. “Our insurance requires it”. Oh, you’re under-insured. Why is that my problem?
9. “I know it’s wrong, but we’ll sort it out with a side letter later”. Yup, and that side letter will never be agreed.
10. “Let’s split the difference”. God, are you that desperate to get it over with? I shall now leverage that information into a much better position for my client…
I’ve been light-hearted about it, but I really do think that this matters. What happens when we can’t put over a proper argument is that we end up with contracts that don’t match commercial reality, and that leave one party (usually the one with the weakest bargaining position) feeling coerced and unsatisfied. That might make your client feel like they’ve “won”, but it’s not a foundation for a successful relationship.
Haven’t we got the skills, the education, and the pride (and, frankly, the salary) to come up with a decent argument? One that coherently explains our client’s needs and commercial interests, is grounded in fact and in law, and is expressed in a reasonable and persuasive manner. One that leads to a position that both sides can accept and buy into, even if it isn’t the most favourable one to them.
We should try it. Who knows, maybe our negotiations will be more successful if we do…
Acknowledgments: thanks very much to @legalbrat [numbers 1, 8 and 9], @sport_lawyer [numbers 2 and 10], @in_house_lawyer [numbers 4 and 6], and to everyone else who responded with their suggestions.