Negotiation Planning

Considering the fact that I was in an unfavorable position in terms of rights and powers, I was prepared to sell my house at the current market price and avoid bankruptcy. But even after selling the house, I was short on cash. BATNA of filing bankruptcy was not a wise alternative. I was targeting to get at least $9100 per unit for condominium project and hoped to get an extension on loan. I expected Pat’s opening move would be to recall the loan and decline the payment of $9500 per unit.

As we started the negotiation, I explained the situation of using Oak in the condominium project while he was on vacation. Based on the past experience, I took the word of his secretary as the final commitment to go ahead with the proposal. I was willing to forego a part of my profit to gain goodwill and maintain the client relationship. But Pat’s obvious argument was that the legal contract was not amended and signed by both parties. Accusing each other would have been extremely counter-productive and we wanted to avoid legal action at all cost. Also, I implied a credible threat to Pat to face the consequences of bankruptcy though it would have been proved to be disastrous for both the parties. Even though there were inherent risks for Pat to invest in my property he took cognizant of the whole situation and holistically analyzed the ROI. In best interest of both the parties, he opted to take a financial hit in short-term and avert the financial crisis. Apparently, both parties valued the relationship more. Since our interests were aligned, we started looking collaboratively for options of mutual gains. Initially, he intended to recall the loan for other investments, however, since I was unable to repay the loan at that time, he kept his interest aside and decided to extend my loan for another 2 years at same interest rate. I also convinced him to renew the lease of the building at $4000 per month. Both parties concurred that when the housing market returned to a more...