Negotiation is when you try to resolve a problem or dispute with another person, informally, by trying to make an agreement. If your problem is a legal dispute, making an agreement through negotiation can mean you don't need to ask a court or tribunal to make a decision for you. You can negotiate by talking to the other people, or by writing a letter, or both.
Negotiation can take place at any time, for example, when a problem first happens, when you are thinking about starting a case, or even after a court case has been started. You can also negotiate an agreement about a whole problem or just part of a problem. There is no right or wrong way to negotiate. There is no right or wrong outcome. The outcome will depend on you and the other party.
There are a number of advantages of negotiating, but there may be situations where it is not appropriate.
Benefits of negotiating
Negotiation may mean:
- the problem is resolved faster than going to court
- it costs less to resolve the problem
- the process is less stressful
- you get an outcome you may not be able to get at court, such as an apology.
Negotiation can take place at any time, for example, when a problem first happens, when you are thinking about starting a case, or even after a court case has been started.
When negotiation is not appropriate
There are some situations where negotiation may not be the right option. For example:
- if there has been violence or threats of violence
- when one of the parties involved will not agree to negotiate
- where you need a court order to protect you or to make the other party do something or stop doing something.
If you are not sure if negotiation is the right choice for you, you should get legal advice.
You can try to negotiate an agreement in a number of different ways. No way is right or wrong. You can:
Meeting with someone can be a good idea if there are many options to talk about.
Before you go to a meeting, you should prepare. It is a good idea to write notes to take with you to the meeting to help you keep on track.
If you are going to meet in person, you can get help from a mediator, a support person or some other neutral third party.
Sometimes a neutral third party, such as a mediator or facilitator can assist both parties to negotiate and reach agreement. For more information, go to the Community Justice Centres website.
If you want to have a support person at the meeting, you should let the other party know. They might also want to have a support person.
A telephone call can be a good option when you and the other parties do not live near each other. Prepare for a telephone call as if it was a face to face meeting.
If you are negotiating with a business or government organisation, you may not have the option to meet in person and a letter may be your only option.
Writing a letter is a good option if:
- you want to make a specific offer. For example, if you want to offer to pay an amount of money or return goods
- you find it very hard to talk to the other party directly
- you want to keep a written record of what you have done to try and resolve the problem.
You can also send an email or text message. You should make sure you save and print out a copy of the email or text message.
If you are going to write a letter, email or text be careful. Sometimes this can cause misunderstandings that can lead to more conflict, particularly if you have not spoken about the problem face to face or by telephone before. Consider carefully how the person you are sending the letter or message to might react and if they might be more likely to come to an agreement with you if you communicate with them personally.
When you write a letter or email you should write the words 'Without Prejudice' on the page. This means the letters sent by you usually can't be used as evidence in court.
This is an example of what a basic letter of offer could look like.
Sample: Sample letter of offer.
Before you begin negotiating with the other party, you should spend some time considering what you are concerned about and what you want to happen. If there are any documents that are relevant to your dispute, you should review them. Good preparation will help you negotiate.
When preparing to negotiate, you should:
Before you start, it is a good idea to gather any documents or information you have about the problem. For example:
- written agreements, contracts or receipts
- letters, emails, text messages
- notes about any conversations.
If the problem has been going on for a long time, you may also want to write a chronology. A chronology is a list of events and the date on which they happened, from the first event to the most recent event. This will help you feel confident when speaking about what happened, and when.
For some types of disputes, for example problems with neighbours or family members, you may not have any documents to bring.
If your dispute involves legal rights and responsibilities, you should get legal advice so you can make a good decision about any agreement.
A lawyer can give you advice about:
- what the law is
- how the law applies to you
- your chances of winning if your matter goes to court
- the court process, including how much time and money going to court might cost
- the time limit for starting any action against the other party.
You can also do some research about your legal rights and responsibilities by:
- visiting a public library
- visiting the Legal Information Access Centre (LIAC) at the State Library of NSW
For more information, see Ways to get help.
Think about what you want from the other person. For example:
- an apology
- an amount of money
- for them to stop chasing you for money, or accept a lesser amount
- for them to return goods to you
- to sort out the dispute so you can move on
- respectful communication in the future.
Think about what the other people involved may want. Will they want something different or are there things you both want?
When you are negotiating, you may learn new information that could change your mind or help you to understand what the other person needs to come to an agreement. For example, if you learn that time is not important to the other person, you could offer to repay the money over a longer period of time.
While it is important to start with what you want, you should consider:
- are you being realistic?
- is what you want possible?
- what does the other party want?
- do you want the same thing?
- can you compromise?
- what's your bottom line?
You and the other party may have to give up some things if you want to reach an agreement.
Think about what might happen if you don't reach an agreement. For example, if you go to court:
- you may want the other party to apologise, while this could be something you agree to, a court will not usually order an apology
- you may get awarded less money than you expect or less than what is offered in negotiations
- you may get ordered to pay your own costs and sometimes the costs of the other party.
Think about your 'must haves' and your 'nice to haves'. Must haves are the things you refuse to give up and the nice to haves are the things you can do without.
It may be a good idea to talk to someone you trust, who is not involved in the problem. They might come up with some new options for how to resolve the problem.
If you want to settle the problem but are worried what the other person will say, you won't know unless you try. For example, if you are negotiating with a business about a debt, such as a bank, credit union, debt collector, collection agency or insurance company, you can make an offer to pay a lesser amount. The business may agree to accept a lesser amount to settle the dispute quickly and cheaply.
For more information, see Tips for negotiating below.
When you are ready to start negotiating, you can contact the other party. Remember to stay calm, keep a record of all your contact and don't give up if it gets tough.
You may feel angry, hurt, upset or anxious. This is normal and understandable. When you are negotiating, consider these tips:
- Try not to speak angrily.
- Use calm language.
- Try not to criticise the other party as this may make it harder to reach agreement.
- Try not to get angry with the other party, and instead focus on resolving the problem.
- Be prepared to listen to the other side, as you will want them to listen to you.
- Ask questions if you do not understand something, or you are not sure if you have understood.
If you are having trouble negotiating, you could try to:
- negotiate in writing if you feel like you cannot talk face to face or over the telephone
- give yourself time to write letters or emails or texts
- get someone else to check your letters or emails or texts before you send them
- prepare notes to take with you to a meeting so you stay on track
- take a support person with you to a meeting
- ask for a break if you are feeling upset in a meeting or during a phone call.
It is a good idea to keep records of:
- conversations
- letters, emails or texts
- dates, times and locations of any telephone calls or meetings.
If you and the other party misunderstand each other or disagree on something that was discussed, it is helpful to have a written record of what happened.
You will probably need more than one phone call, letter, or meeting to reach an agreement. If it looks like you are close to an agreement, don't give up.
If you have not received a reply from the other party, follow up a phone conversation or a meeting with a letter or email.
If you are offered something you have not thought of before and you want time to think about the option, tell the other party and agree on a time when to have the next meeting.
If you are negotiating with a business about a debt, for example a bank, credit union, debt collector, collection agency or insurance company, you can make an offer to pay a lesser amount. The business may agree to accept a lesser amount to settle the dispute quickly and cheaply.
For more information, see Coming to an agreement below.
If you and the other party have been able to come to an agreement - great! You should put the terms of the agreement in writing. If a case has been started in court, you may also need to let the court know about the agreement.
If you and the other party have not been able to agree on how to solve the problem, you need to consider what to do next.
If you and the other party have solved the problem or agreed to settle a claim or dispute before a case is started in a court or tribunal, you can write out an agreement and you can both sign it.
The agreement can be put in the form of a 'Deed of Release'. This is a formal document that sets out the terms of the agreement.
You should make sure that the agreement covers everything it needs to end the dispute. For example:
- If one of the parties have agreed to pay money: include information about how often the payments are to be made, how much they will be for, how much interest has been agreed on and what is the final date for the last payment, what will happen if the payments are not made.
- If items are to be returned or replaced: include information about the date and time when this must happen, where the item must be returned to, who it will be given to, what will happen if the deadline passes without the item being returned.
For more information about preparing a Deed of Release, see Agreements and settlements in the Reading and writing legal documents topic.
Before you sign any agreement, you should get legal advice.
If you have a family law case, although you and the other party may be able to negotiate any agreement you come to, the agreement may need to be formalised in a specific way. You should get legal advice about your family law matter.
If you and the other party reach an agreement after a case is started in a court or tribunal, you will need to stop the case. You may be able to do this by writing and filing 'Terms of Settlement' and/or 'Consent Orders'.
Terms of Settlement is a document that records how the parties have agreed to settle a case. The terms of settlement might say that a consent order or judgment will be given, or a Notice of Discontinuance will be filed.
Consent Orders are orders agreed to by both parties. They set out what will be done to settle the case. The Consent Orders can be filed at the registry of the court or tribunal, or handed to the judge, magistrate or tribunal member, and then an Order will be made.
Consent Orders are generally easier to enforce than an agreement as they have the same effect as a decision of the court.
For more information, see Agreements and settlements in the Reading and writing legal documents topic.
If you and the other party do not reach an agreement by yourselves, you can try mediation or another form of alternative dispute resolution.
For more information, see Mediation.
If your case is about:
- a claim for money, see the My Money topic of this website.
- a claim for damage arising out of a car accident, see the Car accidents topic of this website.
- a claim for goods, see the Uncollected goods topic of this website.
- a dispute with your neighbour about a dividing fence, a tree, or a noise problem, see the My Neighbour topic of this website.
If you are considering making a claim in a court or tribunal, get legal advice.
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