5 Lies That Are Killing Your Contract Negotiations

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When was the last time you got everything you wanted in a negotiation? Not just a good result, but your best-case scenario?

If you’re like most people, that feeling is rare. Typically, you get less than you hoped for and then convince yourself that you’re OK with the outcome. You had to compromise.

This idea that negotiation means compromise is a lie we tell ourselves, and it sabotages our results.

Here are five other lies that are killing your contract negotiations.

Lie #1: People are rational.

Reality: People are irrational, and emotion drives their decision making—not logic.

It can be tempting to idealize negotiation as a logical problem-solving exercise where everybody sets aside emotion and bias.

But that’s not real life.

In reality, negotiations are complex, emotionally-driven interactions. Trying to get what you want by reasoning will always end in frustration.

Instead, focus on understanding and influencing the emotions behind people’s words:

1. Control your tone

We focus most on what we are going to say in a negotiation, but it’s how we say it that will have the greatest impact.

To influence others’ emotions, we first have to control our own. Make your default voice relaxed and positive, and practice keeping it calm even when you’re frustrated.

2. Smile

As humans, our state of mind tends to mirror that of anyone we observe closely. Scientists call this “neural resonance.”

Smiling goes a long way to creating a positive atmosphere where people are more relaxed, more collaborative, and better able to solve problems.

3. Listen

We all have a deep need to feel heard and understood. Listening creates the dynamic of respect and trust necessary for any persuasion to happen.

It also allows you to uncover the emotions behind people’s words.

Which brings us too..

Lie #2: Letting the other person talk means you’re listening.

Reality: Most of us don’t listen; we just stop talking while we plan what we’re going to say next.

We’re so preoccupied rehearsing our next line that we don’t hear a word the other person is saying.

Negotiation is a process of discovery, not a battle. Your goal in any negotiation should be to gather information, not prove a point.

Here are three ways to listen with intention.

1. Don’t think

Quiet your inner voice. Forget about rehearsing your next line. Make the other person and what they are saying your singular focus. All your assumptions could be wrong.

2. Mirror

Verbal mirrors are a simple but effective way to actively listen: just repeat the last three words of what someone just said back to them. Then stop talking.

It shows them you’re listening, and it encourages them to elaborate.

Here’s an example:

Airline agent: “I’m sorry, but there are no flights I can put you on until tomorrow.”

You: “No flights until tomorrow?”

Then wait.

3. Label

Labeling someone’s emotions is a powerful way to show you’re listening, diffuse tension, and create a space where they can reveal more to you.

Here’s how:

  1. Identify an emotion that is driving someone
  2. Put a phrase like “It seems like…” or “It sounds like…” in front of it
  3. Repeat it back to them
  4. Be quiet and listen

Here’s an example:

Client: “Your company is the most incompetent partner we have ever dealt with.”

You: “It sounds like you’re frustrated with how this project has been implemented.”

Then stop talking and listen—even if the silence gets uncomfortable.

Lie #3: “No” is the end of the negotiation.

Reality: “No” is actually the start of a negotiation. “No” simply means “I’m not comfortable yet.”

We are all conditioned to fear the word “no” and try to get to “yes”—but why should we?

“Yes” is a liar

Consider this: How many times have you said “yes” to something and not meant it—just to get someone to leave you alone?

How many times has someone said “yes” to you—only for you to realize they never had any intention behind their apparent agreement?

And how many times have you said “no” to something—only to agree to it later after further consideration?

“No” has superpowers

Far from being something to avoid, “no” has negotiation superpowers.

As humans, we have a deep need to feel in control. “No” instantly creates feelings of safety, security, and control.

In doing so, “no” gives the other person time to evaluate your proposal. “No” brings out hidden objections. And “No” gives you time to convince the other person that your proposal is better than the status quo.

That’s why good negotiators love hearing “no.” It means your counterpart is thinking and engaging with you.

What “no” really means

We are all taught to hear “no” as, “I have objectively considered all the facts and made a final decision.”

Learn to hear “no” differently:

  • I’m not ready to agree
  • I need more information
  • I don’t understand

Far from being the end of a negotiation, “no” simply means you need to keep listening, ask more questions, and adjust your approach.

Lie #4: What matters to you matters to the other person.

Reality: Your counterpart’s real motivations could be very different from your own—and you probably don’t know what they are.

Uncover their real fears and desires, and you can position your vision as the perfect solution.

But if you assume you already know what they want, you won’t even know what to listen for.

Instead of assuming, create multiple hypotheses—then test them against what you learn.

The best real estate deal history

In 1801, US President Thomas Jefferson sent Robert Livingston to France to try and negotiate the purchase of New Orleans for $10 million.

New Orleans was strategically important as the gateway to the Mississippi River, but for two years, tensions built and no agreement could be reached.

Then one day in 1803, Napoleon’s Treasury Minister called Livingston into his office. Livingston came prepared to negotiate the purchase of New Orleans for $10 million.

Imagine his disbelief when France offered the entire Louisiana Territory—an area that covered one third of the continental United States—for $15 million.

Pressed by a looming war with England and slave revolts in the colonies, Napoleon had decided the territory was worth $15 million to him.

Don’t ever assume someone thinks or values things the same way you do.

Lie #5: The result of a negotiation should be “fair.”

Reality: “Fair” has no objective definition. It can mean very different things to different people. Any outcome that both parties can agree to willingly is “fair.”

As humans, we are socially conditioned to place a high value on fairness—just try and cut the line or take an extra piece of pie at Thanksgiving and see how people react.

We accept things we see as fair and lash out against things we perceive as unfair.

As a result, “fair” is the most powerful word in any negotiation—and if you aren’t careful, it will derail you.

“Fair” is a cop-out

Instead of negotiating what we really want, “fair” makes us settle for less for fear of being seen as demanding or unreasonable.

The reality is that negotiating is uncomfortable, and most of us aren’t willing to sit with that discomfort for too long.

So we compromise—to ease the tension and end the discomfort. We settle for “splitting the difference.”

And then we tell ourselves that the deal we accepted was “fair.”

Next time you are tempted to talk yourself down from your goal in the name of fairness, remember the story of the Louisiana Purchase, and stick with the process.

The US ambassador thought $10 million was a fair price for New Orleans.

France offered him one-third of the continental United States for $15 million.

How to actually be “fair”

Here’s the truth: “Fair” is an emotional reality—not a quantifiable, rational one.

People will feel an agreement is “fair” based on how you made them feel, not the objective outcome.

Don’t ask yourself, “What’s fair?”

Ask, “How can I make this person feel understood and validated while communicating what I want?”

Recap

Many of us believe lies about contract negotiations that are sabotaging our results:

  1. People are rational.
  2. Letting the other person talk means you’re listening.
  3. “No” is the end of the negotiation.
  4. What matters to you matters to the other person.
  5. The result of the negotiation should be “fair.”

Update these misconceptions and you can start negotiating deals you didn’t think were possible.

Further reading

Most of the ideas in this article come from the excellent book Never Split the Difference: Negotiating As If Your Life Depended On It by retired FBI hostage negotiator Chris Voss.

If you’re interested in becoming better at contract negotiations, this is a great place to start. It’s full of actionable insights that you can apply to your life immediately.