Insights
Negotiation.
Negotiation is direct discussion between the parties, or their representatives, to settle a dispute themselves.
How it works
No third party takes part. The parties meet, exchange their positions and try to agree. Any agreement is a contract between them and should be recorded in writing and signed.
When it is used
Negotiation is the first step in most contracts’ dispute clauses and the cheapest one. It works best when both parties have the facts in front of them.
Preparing
- Collect the contract, the correspondence, the certificates and the site records.
- State the claim or defence in writing, with amounts and dates.
- Check the contract for notice requirements before any step is taken.
- Decide in advance what outcome would be acceptable.
Limits
Negotiation has no decision-maker. If the parties cannot agree, a further process in the contract, such as mediation, adjudication or arbitration, applies.