Redoing the Deal

Negotiation advisor Jeswald Salacuse suggests that renegotiations generally occur for one of two reasons: The agreement was imperfect when it was designed, or the circumstances surrounding the agreement have changed. Salacuse offers two sets of advice: what to do before the deal breaks down and what to do after the deal breaks down.

Before the deal breaks down:

1. Build a relationship with the other side that can be used in case the deal falters.

2. Take the time to build the relationship.

3. Provide for mechanisms to renegotiate if the deal breaks down.

4. Consider how to involve a third party if the deal breaks down.

After the deal breaks down:

1. Avoid negativity and anger.

2. Decide whether what you want to renegotiate could ruin the relationship-and whether it is worth it.

3. Create new value through the renegotiation.

4. Fully evaluate the costs of failure.

5. Involve all the critical parties.

6. Design the right environment and process to do the renegotiation.

7. Consider how to involve a mediator or other third party to help out.