This is the ninth post in a series entitled: The Principles of International Negotiation: Finding Universal Value in a Complex World

Every term in contracts and negotiations should be of some value. And each term has an associated cost. As a negotiator, knowing the rationale for a term enables you to articulate the value and identify its cost. The value of the total deal is the aggregate impact of all the terms. If you don’t understand the rationale behind the terms, not only is your credibility impacted, but so is your leverage.

Suppose you are negotiating a private label distribution OEM (original equipment manufacturer) deal, representing the seller. The seller’s standard agreement has a term in the contract that states: “In the event any part fails within the warranty period, the customer may return the part at customer’s expense and supplier will send a replacement part within three business days.” Read more