Point of No Return

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Identification

This deal tactic is often used both legitimately and illegitimately. When deployed, it looks like one party blocking the other as follows: insisting it is “too late,” that we are well beyond the issue being argued, and the only way out is forward. On one hand, it is used legitimately when issues need to be closed out so forward progress can be made. Re-opening negotiation points often obstructs the goal, frustrates both parties, and wastes time. But this tactic is also used to block legitimate concerns, as a catch phrase that seems legitimate – “We can’t go back, we are too far along.” But are you really? That depends on where you are in the negotiation. It is perfectly fine to reopen a previous issue when another issue impacts the deal in ways the parties did not know beforehand.

Example

For example, a contract may contain an insurance provision adding the contracting party as an additional insured. In other words, if things go wrong, the policy will cover both parties to the contract—the holder and the party entering a contract with the holder, let’s say a construction contractor. The policyholder may waive adding the contractor as an additionally insured as a negotiation point. Then the indemnity section comes up in the negotiation, and this section allocates risk to the person who made the mistake. If the contractor balks on the indemnity provision, it may be perfectly legitimate to re-open the insurance provisions. The contractor may insist that a party waived the right to open that provision because we are “moving forward and beyond the point of no return.”

Solution

The way to counteract this deal tactic is to question it, using a three-step line of questioning:
  1. Was it a truly closed issue?
    • Sometimes we lose sight of which issues are closed or open. One party may insist an issue is closed, but it was never agreed upon. Note-taking and writing down closed issues ensures this does not happen.
  2. Are we really beyond the point?
    • Is there some hard deadline that has passed, or has one party materially taken a different position and incurred cost or lost time due to the issue being argued? If so, claiming point of no return is legitimate.
  3. Is it destructive to the negotiation dynamic?
    • In tense trust-intensive negotiations like diplomatic or familial situations, trust is key. To go back can be very destructive to building an agreement or consensus. Is this a major deal or would opening it up destroy trust?
    • Multiparty negotiations can go on and on if this is not tamped down, wasting time, money, and impetus to close the deal.

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