The Jolly Contrarian

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These qualities interact and depend on each other: agreements which are fair will need to be clear, those that are clear will inspire confidence in your vown staff, which will tend them away from the [[Casanova principle]] towards fairness; an agreement that is clear and fair lends itself to consistency, since there will be less cause to negotiate and one that is fair, clear and consistent is easy to maintain and, heaven forfend, enforce.
These qualities interact and depend on each other: agreements which are fair will need to be clear, those that are clear will inspire confidence in your own staff, which will tend them away from the [[Casanova principle]] towards fairness; an agreement that is clear and fair lends itself to consistency, since there will be less cause to negotiate and one that is fair, clear and consistent is easy to maintain and, heaven forfend, enforce.


===Fair===
===Fair===
{{Drop|F|airness as an}} abstract quality seems like one of those lip-servicey, all-very-well-in-theory ideas that got you good grades in that [[alternative dispute resolution]] module but ships a haymaker to the jaw on first contact with the real commercial world.
{{Quote|“There could be no negotiating with terrorists.”
:—Attributed to Richard Nixon}}
{{Drop|[[Qualities of a good ISDA|F]]|airness as an}} abstract quality seems like one of those lip-servicey, all-very-well-in-theory ideas that got you good grades in that [[alternative dispute resolution]] module but is sure to ship a haymaker to the jaw on first contact with the real commercial world. We are enculturated to treat a negotiation as some kind of trench warfare: as if we are facing our mortal enemy and not our customer. It is true that our customers are similarly disposed, fairness never gets a chance to break out.


We like to tell ourselves that, we ''do'' tell ourselves that, we are enculturated to present in the trenches as if facing a mortal enemy, and as the counterparty is similarly disposed fairness never gets a chance to break out.
But this is no [[single round prisoner’s dilemma]]. To show fairness is not to show weakness, but ''strength''.
 
JC is by lifelong experience a [[sell-side]] guy: he comes at this from the perspective of a merchant contracting with its customers. Hip types call these “B2C” deals, but the JC is not a hip type. Merchant and customer are, generally, on the same side: their interests conflict but gently, and not viciously: the merchant wants a [[commission]]  or a markup, the customer wants the product cheap, but beyond that we each wish earnestly for each other’s continued prosperity. Things can get chewy at the extremes, but most customers never get near a [[tail event|chewy extreme]].


But this is no [[single round prisoner’s dilemma]]. To show fairness is not to show weakness, but ''strength''.
Now sell-siders may occasionally engage with ostensible hostiles — competitors for example — but when they do, they abide by an unspoken pact of [[good faith]] for the limited ends which have brought the warring sides together. They must, at some level, trust one other or at least have a common interest, or they would not contract at all.  


JC is by lifelong experience a [[sell-side]] guy: he comes at this from the perspective of a merchant contracting with its customers. We are, generally , all on the same side: our interests gently conflict but not viciously: I want a commission, you want cheap implied funding, but beyond that we each
We don’t negotiate with terrorists.
wish earnestly for each other’s continued prosperity. Things can get chewy at the extremes, but most customers never get near a [[tail event|chewy extreme]].


We may occasionally engage contract with apparently hostile parties — competitor brokers, in litigation — but even when we do, we presume limited pact of good faith for the purpose of the common end to which both sides aspire. We must, at some level trust each other, or we would not contract at all. We don’t negotiate with terrorists.
In any case, the “merchant-to-customer” contract is, by a landslide, the most common kind. Those with any in-house experience of bona fide, non-existential, customer disputes know one thing: if there is any doubt — and frequently, when there isn’t — ''the business will roll over''. No-one takes a point with a solvent client.


In any case, the “merchant to customer” contract is, by a landslide, the most common kind. If you have any in-house experience of bona fide, non-existential, customer disputes you will know one thing: when there is any doubt, and frequently when there is no doubt, the business will roll over. This is nothing more than common sense: you stand far more to gain in future revenue by preserving the relationship at small cost now then taking a literal stance on technical errors.
This is nothing more than common sense: you stand far more to gain in future revenue by preserving your relationship at the small cost of excusing a customer the occasional gaffe than taking a literal stance on technical errors.


This instinct is so pronounced that compliance teams have contrived processes to validate these waivers to ensure they do not amount to impermissible “inducements”.
The instinct to let it go is so pronounced that compliance teams have contrived means to prevent these waivers for fear they are impermissible “inducements”. Were it not for the deeply embedded [[agency problem]] inside most organisations by dint of which they could well be, this would be absurd.


In any case, the commercial imperative is such an overwhelming power that there is little point in starting with, or achieving, terms that go beyond fair. No-one will ever use them. Seeing as, all other things being equal a you will complete a fair contract faster than you will an unfair one — [[the ideal negotiation is no negotiation]] — you should start with a fair template.
In any case, the [[commercial imperative]] is so overwhelming an factor in the post-contract business relationship that there is little point in starting with, let alone achieving, terms that go beyond fair. ''No-one will ever use them''. Seeing as, all other things being equal a you will complete a fair contract faster than you will an unfair one, and seeing as [[the ideal negotiation is no negotiation|the ideal negotiation is ''no'' negotiation]] — you should start with a fair template.


===Confident===
===Confident===
Your form should inspire confidence in your negotiation team. They should feel comfortable with it, they should understand it, you should encourage them to go beyond its formal articulation and understand the underlying commercial drivers.
{{Drop|Y|our form should}} inspire confidence in your negotiation team. They should feel comfortable with it, they should ''understand'' it, they should understand the product it governs, and you should encourage them to go beyond its formal articulation and understand the underlying commercial drivers of the relationship. If they do, it will make plain the parts of the contract that aren’t achieving what they seem to be.
 
A negotiation team that is fearful of its material will hide behind formal rules. They won’t be drawn to discuss it — if they don’t understand it, why would they put that vulnerability on show? — so will resort to the usual electronic trench warfare of long, bulleted issues listed that pass tediously between negotiation counterparties and within organisations as they go through their motions of escalating and clearing issues.  


A negotiation team that is fearful of its material will hide behind formal rules. They won’t be drawn to discuss it — they don't understand it, so why would they put that vulnerability on show? — so will resort to the usual electronic trench warfare of long, bulleted issues listed that exist between counterparties and within organisations. This is to prefer the form over the substance — no-one should be surprised to see that our high modernist times — but deference to a plainly suboptimal form — which doesn't net our saintly criteria — is no cause for celebration. A confident negotiating team engages with the form rather than deferring to it.
Reverence to and intimidation by your own contractual form is madness, of course: we should not be surprised, in our [[High modernism|high modernist]] times, that we fetishise the [[Substance and form|form over the substance]]  — but deference to a contractual form that is plainly suboptimal — which doesn’t meet our saintly criteria — is no cause for celebration. A confident negotiating team ''engages'' with the form rather than deferring to it. This is the negotiator’s version of “[[jidoka]]”: the human touch that makes the machine sing.


=== Clear ===
=== Clear ===
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{{Drop|I|t helps with}} clarity if you have confidence in a scrape that you know what you're ISDA is going to say where it matters.  You can be sure of this if you are rigourous about quality control where it matters.  (Where it doesn’t — acquiescing to a counterparty’s required modern slavery representation or agreeing to the ethical treatment of the environment etc, you can afford to take a view)
{{Drop|I|t helps with}} clarity if you have confidence in a scrape that you know what you're ISDA is going to say where it matters.  You can be sure of this if you are rigourous about quality control where it matters.  (Where it doesn’t — acquiescing to a counterparty’s required modern slavery representation or agreeing to the ethical treatment of the environment etc, you can afford to take a view)


How, JC, do we force a counterparty to take our credit terms? No-one in their right mind would do that! We have to negotiate every time! And plus, we can’t stop our counterparties insisting on bespoke terms you know: this is a client service business! We cannot dictate!
“How, JC, are we supposed to force a counterparty to take our credit terms? No-one in their right mind would do that! We have to negotiate every time! And plus, we can’t stop our counterparties insisting on bespoke terms, you know: this is a client service business! We cannot dictate!”
 
Quite so: and we commend [[serenity’s prayer]] to you.
 
There are things you ''can'' change — your own docs — and things you may not be able to: the customer’s pet peeves.
 
====== Your forms ======
if you start off with something you know to be unacceptable to your customers do not be surprised when they do not accept it stop therefore, rebase your documents to be at least in concept of all from the off. There is a false economy or at any rate a misalignment in believing that your premium clients should be offered better terms then your regular ones. Your premium customers take greater risk and present greater catastrophe.. on a greater scale stop if you are prepared to run this risk with the premium customer then you should be prepared to run it with a smaller custom or two. This will also reduce the time you spend fruitlessly negotiating with customers who you know be generating less of your revenue.


Quite so: and we commend [[serenity’s prayer]] to you. There is a portion of this you can change; your own docs. If you start off with something you know to be unacceptable to your customers do not be surprised when they do not accept it stop therefore, rebase your documents to be at least in concept of all from the off. There is a false economy or at any rate a mis alignment in believing that your premium clients should be offered better terms then your regular ones. Your premium customers take greater risk and present greater catastrophe.. on a greater scale stop if you are prepared to run this risk with the premium customer then you should be prepared to run it with a smaller custom or two. This will also reduce the time you spend fruitlessly negotiating with customers who you know be generating less of your revenue.
Nor does de-escalating your starting position we can your hand in the negotiation. Your walk away remains your walk away Colin the sooner you get to it the better that it's does not take long tends to focus our customers mind even one a customed to long and rewarding negotiations.
Nor does de-escalating your starting position we can your hand in the negotiation. Your walk away remains your walk away Colin the sooner you get to it the better that it's does not take long tends to focus our customers mind even one a customed to long and rewarding negotiations.
Furthermore if you are diligent and consistent in your positioning, customers and their advisors will quickly tyre of banging their heads against a brick wall and will accept what is, after all, a reasonable position.
Furthermore if you are diligent and consistent in your positioning, customers and their advisors will quickly tyre of banging their heads against a brick wall and will accept what is, after all, a reasonable position.


====== Customer pet peeves ======
It is true that you cannot change the negotiating position of a truculent customer, but by rebating your documents to something more agreeable you perhaps avoid painting the clients into a corner from which it will not then back down in the first place.
It is true that you cannot change the negotiating position of a truculent customer, but by rebating your documents to something more agreeable you perhaps avoid painting the clients into a corner from which it will not then back down in the first place.


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All else being equal, make it ''simple''. This is somewhat conditional, by serenity's prayer, your counterparty night have a ten for its own convoluted terms, and it takes advanced Dale Carnegie diplomacy to persuade such a chap not to self-harm — but at the least do not be the progenitor of unnecessary complication. Convolution causes confusion, confusion leads to explanation, explanation leads eventually to resolution, but that resolution takes time, burns resources, and comes at the cost of formal  or even substantive variance from your standard.  
All else being equal, make it ''simple''. This is somewhat conditional, by serenity's prayer, your counterparty night have a ten for its own convoluted terms, and it takes advanced Dale Carnegie diplomacy to persuade such a chap not to self-harm — but at the least do not be the progenitor of unnecessary complication. Convolution causes confusion, confusion leads to explanation, explanation leads eventually to resolution, but that resolution takes time, burns resources, and comes at the cost of formal  or even substantive variance from your standard.  


Having to explain something that should have been clear in the first place is, at the least wasted evergy.
Having to explain something that should have been clear in the first place is, at the least wasted energy.


Use plain language. Short sentences, modern language. Write agreeably: “must” instead of “shall be obligated to —”; “may” instead of “shall be entitled but, for the avoidance of doubt, not obliged to —”.
Use plain language. Short sentences, modern language. Write agreeably: “must” instead of “shall be obligated to —”; “may” instead of “shall be entitled but, for the avoidance of doubt, not obliged to —”.
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