Negotiation

Negotiating With Liars

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Numerous studies confirm that few people can make it through a typical day without lying.

So it should not be surprising that falsehoods and deception are widespread in business negotiations as well. The unspoken, and perhaps unconscious, thought is that if everyone lies, why is it so bad? The author examines legal and ethical views of lying, noting that while courts often hold parties to the truth of their representations, negotiators have many ways to mislead the opposing side. For example, negotiating tactics such as nondisclosure and evasion are rarely considered illegal. Indeed, it is often possible to avoid liability by using misleading behaviors that make no representations but which seem to. In light of the moral and legal ambiguity of lying, the author offers suggestions for how to detect lies and how to protect oneself against bargaining deception including: establishing negotiating ground rules before the discussions begin, asking the same question in different ways, asking questions to which you already know the answer, including written claims in the final agreement, using contingent agreements or using an escrow agent or a performance bond.

Robert S. Adler is the Luther H. Hodges Sr. Scholar in law and ethics at the University of North Carolina’s Kenan-Flagler Business School, in Chapel Hill, North Carolina. Comment on this article or contact the author through smrfeedback@mit.edu.

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