A certain amount of cunning from both sides in business negotiations is fairly common. While nobody expects you to act like a saint, you must be careful not to induce people to act on an assumption that you will proceed with a deal if you have no intention of doing so. If you find yourself in the reverse situation where the other party promises to sign on the dotted line after you perform certain tasks, do not rely just on their word; insist that it is written into the final contract. We can advise you on how to do this and prepare the necessary documentation.

Think you need to be as ruthless as possible in all commercial negotiations because everybody else is?

We ask you to reconsider. While positive outcomes often result from firm negotiations, if you suspect that the other side is not giving you the full story, you should get legal help.

Consider the following case study:

Mr and Mrs M owned land. Company W negotiate with the Ms for months to get a lease over their land. The Ms agree to demolish the old building on their land and erect a new building for W in exchange for W paying more under the lease.

The Ms tell W that they will start demolishing the old building shortly and said that they wanted to finalize the agreement in the next few days. W’s response gave the impression that they were comfortable with the Ms commencing demolition works and they stated that they would let the Ms know in the next 24 hours if they did not intend to proceed with the lease. W did not contact the Ms over the next 24 hours.

The Ms demolish the old building and are halfway through constructing the new building when W tells them that they will not proceed with the lease (Waltons Stores v Maher (1988) 164 CLR 387).

Reader’s Tip

If you find yourself in a similar situation to the Ms, do not make an absence of contact the indicator of acceptance at any stage because non-contact can be due to any number of reasons, including, death, forgetfulness, missed calls or messages not being passed on. Make it a habit to always require acceptance to be expressed, preferably in writing, before negotiations move to the next stage.

Joe Kafrouni
Legal Practitioner Director
Kafrouni Lawyers

Disclaimer

The information provided by Kafrouni Lawyers is intended to provide general information and is not legal advice or a substitute for it. Business people should always consult their own legal advisors to discuss their particular circumstances. Kafrouni Lawyers makes no warranties or representations regarding the information and exclude any liability which may arise as a result of the use of this information. This information is the copyright of Kafrouni Lawyers.

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