Negotiating With Liars

Lying is a central aspect of human behavior. Negotiators need to learn about every tool that will protect their interests.

One of the enduring truths about human beings is that we lie — frequently and often quite casually. In fact, if one believes the recent claims of many psychologists, the impulse to deceive resides deep within our genes, a central feature of our common humanity. As one scholar of deception puts it, “Lying is not exceptional; it is normal, and more often spontaneous and unconscious than cynical and coldly analytical. Our minds and bodies secrete deceit.”1

Numerous studies confirm that few people can make it through a typical day without lying.2 In one, subjects asked to keep diaries of their conversations reported that they told lies anywhere from 30% to 50% of the time on topics including their feelings, their actions and their plans and whereabouts.3 Some 60% of newly introduced individuals lie to one another within minutes simply to create a favorable impression,4 and dating couples apparently lie to each other even more.5 According to the most conservative estimates of human resource managers, 25% of all résumés contain significant lies.6 Moreover, lying behaviors start early — typically at age three or four.7

It should not be surprising, then, that when it comes to negotiation, the process is often strewn with falsehoods and deception. In fact, many observers find it difficult to imagine negotiating without some element of deception. Professor James White, an expert in the field, writes:

On one hand the negotiator must be fair and truthful; on the other he must mislead his opponent. Like the poker player, a negotiator hopes that his opponent will overestimate the value of his hand. … The critical difference between those who are successful negotiators and those who are not lies in this capacity both to mislead and not to be misled.8

The Morality and Legality of Lying

The pervasiveness of lying may cause some negotiators to become overly casual about the truth.

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References

1. D.L. Smith, “Why We Lie: The Evolutionary Roots of Deception and the Unconscious Mind” (New York: St. Martin’s Press, 2004),15. For additional discussion of the psychology of lying, see R. Wright, “The Moral Animal: Why We Are the Way We Are: The New Science of Evolutionary Psychology” (New York: Pantheon Books, 1994), 324–325.

2. See B.M. DePaulo, S.E. Kirkendol, D.A. Kashy, M.M. Wyer and J.A. Epstein, “Lying in Everyday Life,” Journal of Personality and Social Psychology 70, no. 5 (May 1996): 979–995; Smith, ”Why We Lie,” 9–16; and A. Kornet, “The Truth About Lying,” Psychology Today (May–June 1997), 52–58. The seminal work on lying is S. Bok, “Lying: Moral Choice in Public and Private Life” (New York: Vintage, 1978).

3. DePaulo, “Lying in Everyday Life,” 990.

4. R.S. Feldman, J.A. Forrest and B.R. Happ, “Self-Presentation and Verbal Deception: Do Self-Presenters Lie More?” Basic and Applied Social Psychology 24, no. 2 (2002): 163–170.

5. Kornet, “The Truth About Lying,” 53 (citing studies by B.M. DePaulo).

6. T. Prater and S.B. Kiser, “Lies, Lies and More Lies,” SAM Advanced Management Journal 67 (Spring 2002): 9–16.

7. See M. Lewis, “The Development of Deception” in “Lying and Deception in Everyday Life,” eds. M. Lewis and C. Saarni (New York: Guilford Press, 1993), 90–105.

8. J.J. White, “Machiavelli and the Bar: Ethical Limitations On Lying in Negotiation,” American Bar Foundation Research Journal 5, no. 4 (autumn 1980): 926–938, 928. Scholars have repeatedly noted the propensity of negotiators to lie. See, for example, M. Schweitzer, “Negotiators Lie,” Negotiation 8, no. 12 (December 2005): 1.

9. G.R. Shell, “When Is It Legal to Lie in Negotiations?” Sloan Management Review 43, no. 1 (spring 1991): 93–101.

10. Ibid., 94–98. See also W. P. Keeton, D.B. Dobbs, R.E. Keeton and D.G. Owen, “Prosser and Keeton on the Law of Torts,” 5th ed. (St. Paul, Minnesota: West Publishing, 1984), §§107–109, 737.

11. Shell, “When Is It Legal to Lie in Negotiations?” 99.

12. “Commercial negotiations seem to require a talent for deception.” Ibid., 93.

13. S.P. Green, “Lying, Misleading and Falsely Denying: How Moral Concepts Inform the Law of Perjury, Fraud and False Statements,” Hastings Law Journal 53 (2001): 157–212, 160.

14. Section 2-313 of the Uniform Commercial Code provides that an express warranty is created “by any affirmation of fact or promise made by the seller to the buyer which relates to the goods and becomes part of the ‘basis of the bargain.’ ” Section 2-312(2) provides, however, that “an affirmation merely of the value of the goods or a statement purporting to be merely the seller’s opinion or commendation of the goods does not create a warranty.” These latter affirmations are commonly referred to as “puffs.”

15. Ed Miller & Sons Inc. v. Earl, 502 N.W. 2d 444 (Nebraska 1993).

16. Ellmer v. Delaware Mini-Computer Sys. Inc., 665 S.W. 2d 158 (Texas App. 1983).

17. Melotz v. Schecls, 801 P. 2d 593 (Montana 1990).

18. Two of the most well-known commentators in the law of sales have thrown in the towel. See J.J. White and R.S. Summers, “Uniform Commercial Code,” 4th ed. (St. Paul, Minnesota: West Publishing, 1995), § 9.4, 335. They state that “anyone who says he can tell a ‘puff’ from a warranty is a fool or a liar.”

19. To avoid speculators driving up the cost of land for Disney World, the Disney Corp., in 1964, purchased 27,400 acres in Orange and Osceola Counties in Florida through the use of dummy corporations and confidential agents operating under such names as the Latin-America Development and Management Corp. and the Reedy Creek Ranch Corp. See http://en.wikipedia.org/wiki/Disney World.

20. The most frequently cited reason is that forcing parties with superior knowledge to share information that they have painstakingly and expensively acquired would undermine their incentive to seek and gather such information, thus imposing serious efficiency costs on the public. As Professor Donald Langevoort states: “Though the law of nondisclosure is fluid and fuzzy, there is widespread recognition that parties to a negotiation are privileged to withhold at least some crucial information from the other, lest there be a disincentive to the socially beneficial production or discovery of that sort of information.” See D.C. Longevoort, “Half-Truths: Protecting Mistaken Inferences By Investors and Others,” Stanford Law Review 52 (1999): 87–125, 89–90.

21. The courts have required affirmative disclosure in at least four circumstances: (1) when the nondisclosing party makes a partial disclosure that is or becomes misleading in light of all the facts, (2) when the parties stand in a fiduciary relationship to one another, (3) when the nondisclosing party has “superior information” vital to the transaction that is not accessible to the other side and (4) when special transactions are at issue, such as insurance contracts. Shell, “When Is It Legal To Lie in Negotiations?” 95.

22. On this point, Shell states, “there is no commandment in negotiation that says ‘Thou shalt answer every question that is asked.’ And as an aspiring idealist, I have found it useful to follow this rule: Whenever you are tempted to lie about something, stop, think for a moment, and then find something — anything — to tell the truth about.” See G.R. Shell, “Bargaining For Advantage: Negotiation Strategies For Reasonable People” (New York: Penguin Books, 1999), 228.

23. I. Kant, “Lectures on Ethics 226,” trans. L. Infield (1963), in Green, “Lying , Misleading and Falsely Denying,” 159.

24. See, for example, G.S. Goodman, T.L. Luten, R. S. Edelstein and P. Ekman, “Detecting Lies in Children and Adults,” Law and Human Behavior 30, no. 1 (May 2006): 1–10 (noting that, on average, people’s accuracy in detecting adults’ lies rarely exceeds chance guesses); P. Ekman and M. O’Sullivan, “Who Can Catch a Liar?” American Psychologist 46, no. 9 (1991): 913–920; C. Lock, “Deception Detection: Psychologists Try to Learn How to Spot a Liar,” Science News 166, no. 5 (July 31, 2004): 72–73; and R.M. Henig, “Looking For the Lie,” New York Times Sunday Magazine, February 5, 2006, sec. 6, p. 47.

25. That is, one choosing randomly between “truth” or “falsity” would have a 50–50 chance of getting the correct answer. Few test subjects get more than 50% of their guesses right when they seek to determine whether a person is telling the truth in a controlled experiment. See S. Kassin, “On the Psychology of Confessions: Does Innocence Put Innocents At Risk?” American Psychologist 60, no. 3 (April 2005): 215–228, 217.

26. S. Mann, A. Vrij and R. Bull, “Suspects, Lies and Videotape: An Analysis of Authentic High-Stake Liars,” Law and Human Behavior 26, no. 3 (June 2002): 365–376; B.M. DePaulo, J.I. Stone and G.D. Lassiter, “Deceiving and Detecting Deceit,” in “The Self and Social Life,” ed. B.R. Schlenker (New York: McGraw Hill,1985), 323–370; and A. Vrij, “Detecting Lies and Deceit: The Psychology of Lying and Its Implications For Professional Practice” (Chichester, United Kingdom: Wiley, 2000). Vrij reviews more than 40 studies about liars’ behavior.

27. DePaulo, “Deceiving and Detecting Deceit,” 340, Table 12–4.

28. J.E. Hocking et al., “Detecting Deceptive Communication From Verbal, Visual and Paralinguistic Cues,” Human Communication Research 6, no. 1 (fall 1979): 33–46.

29. Mann “Suspects, Lies and Videotape,” 366.

30. Ibid, 371.

31. Ibid.

32. For a review of studies that have examined skilled professionals’ accuracy in controlled experiments and have demonstrated no greater skill in detecting lies than untrained laypeople, see Ekman, “Who Can Catch a Liar?” 913; and Kassin, “On the Psychology of Confessions,” 217.

33. B.M. DePaulo and R.L. Pfeifer, “On-the-Job Experience and Skill at Detecting Deception,” Journal of Applied Social Psychology 16, no. 3 (1986): 249–267; and Ekman, “Who Can Catch a Liar?” 919.

34. Employee Polygraph Protection Act of 1988, P.L. 100–347, 29 U.S.C. §§ 2001–09 (1988).

35. Board on Behavioral, Cognitive and Sensory Sciences and Education, National Academy of Sciences, “The Polygraph and Lie Detection,” www.nap.edu/books/0309084369/html.

36. D. Eggen and S. Vedantam, “Polygraph Results Often in Question,” Washington Post, May 1, 2006, sec. A, p. 1.

37. Ekman, “Who Can Catch a Liar?” 914. See also P. Ekman and W.V. Friesen, “Detecting Deception From the Body or Face,” Journal of Personality and Social Psychology 29, no. 3 (1974): 288–298; and P. Ekman, W.V. Friesen and M. O’Sullivan, “Smiles When Lying,” Journal of Personality and Social Psychology 54, no. 3 (1988): 414–420.

38. Ibid.

39. See P.R. Wolpe, K.R. Foster and D.D. Langeleben, “Emerging Neurotechnologies For Lie-Detection: Promises and Perils,” American Journal of Bioethics 5, no. 2 (2005): 39–49; R. Willing, “Terrorism Lends Urgency to Hunt For Better Lie Detector,” USA Today, Nov. 4, 2003; D. Wagner, “Arguments Rage Over Voice-Stress Lie Detector,” The Arizona Republic, Oct. 10, 2005; and M. Hansen, “Truth Sleuth or Faulty Detector?” ABA Journal 85 (May 1999): 16.

40. P.C. Cramton and J.G. Dees, “Promoting Honesty in Negotiation: An Exercise in Practical Ethics,” Business Ethics Quarterly 3, no. 4 (1993): 359–394.

41. S.R. Peppett, “Lawyers’ Bargaining Ethics, Contract and Collaboration: The End of the Legal Profession and the Beginning of Professional Pluralism,” Iowa Law Review 90 (2005): 475–538.

42. Mann, “Suspects, Lies and Videotape,” 372.

43. Langevoort cites a variety of circumstances that affect court rulings in this area of fraud law: the precise words used, the relative sophistication of the parties, whether the parties are bargaining face to face and so on. Langevoort, “Half-Truths,” 102–109.

44. The elements of common law fraud for omission or failure to disclose facts are: (1) an omission to state or disclose, (2) material facts, (3) when there is a duty to do so, (4) with intent to deceive or mislead, (5) causing justifiable reliance on the part of the victim and (6) which is the proximate cause of injury. See N.W. Palmieri, “Good Faith Disclosures Required During Precontractual Negotiations,” Seton Hall Law Review 24 (1993): 70–213, 142. See also, Henry v. Office of Thrift Supervision, 43 F. 3d 507 (10th Cir. 1994).

45. Contingent agreements are often used in circumstances in which the parties have different and irreconcilable visions of the future. Rather than argue endlessly about what the future holds, the parties can simply put a contingency in the agreement that provides different outcomes depending on which version of the future proves accurate. See M.H. Bazerman and J.J. Gillespie, “Betting On the Future: The Virtues of Contingent Agreements,” Harvard Business Review 77, no. 5 (September–October 1999): 155–160.