Negotiating the Spirit of the Deal

by Ron S. Fortgang, David A. Lax, and James K. Sebenius

EXPERIENCED NEGOTIATORS ARE generally comfortable working out the terms of an economic contract: They bargain for the best price, haggle over equity splits, and iron out detailed exit clauses. But these same seasoned professionals often spend so much time hammering out the letter of the deal that they pay little attention to the social contract, or the spirit of the deal. So while the parties agree to the same terms on paper, they may actually have very different expectations about how the agreement will work in practice. Without their arriving at a true meeting of the minds, the deal they’ve signed may sour.

Consider the fate of a joint venture launched ...

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