You don’t have to have ever sat in a mediation to know the disagreeing parties almost never settle on the first offer made!
This is how it usually goes:
- an offer is made;
- a counter offer is made;
- repeat the above as many times as needed;
- final offer made;
- final offer agreed
Hallelujah!
So, why don’t people keep rejecting offers and rebounding them with counter offers? Here are a few reasons:
Fear Of Missing Out (FOMO)
Both parties are often worried about missing out on a better offer, so they will always try their luck and hold out for something better. Sounds like a logical tactic in theory, but pushing things too far can have you settle on something worse than the original offer!
An Innate Desire To Haggle
It’s human nature for people to want the best deal so they’ll always try and haggle. Accepting the first offer dealt can come across as weakness or over-eagerness. You want to sound tough and stubborn to deal with.
Not Understanding The Consequences Of The Offer
Sometimes, people don’t know whether the offer presented to them is good for them. Some offers have nice short-term consequences but don’t make sense for the long-term. Otherwise, you’re just not sure and so you’ll reject the offer until you and your team can internally define what it is that makes a good enough offer.
Wearing Down The Other Side
On many occasion, a party will keep rejecting offers in the hope the opposing party will wear down, get tired and give in, and will do anything to end the mediation. – giving you exactly what you wanted.
But what do you do, if the opposition says this is their “final” offer? Are they bluffing or do they mean it? Can I say no and get something better or is this the best I will get?
In this article, I will explain how to best deal out the “final” offer.
Giving The Final Offer
If you are going to give the final offer, make sure it is genuinely the final offer. What I mean by this is, check that you have left no stone unturned and that there isn’t another (better) way forward.
Secondly, if it is your final offer, there can be no further offers. If the opposing party asks for something else and you give in, it will undermine your entire credibility and will give the other party a mental edge. Final should mean final.
I’d be reluctant to advise people to give a final offer because it’s a little bit against the spirit of mediation. It’s like you’re saying there’s no more discussion after this. Final offers definitely have their place in mediation, once all other avenues have been exhausted.
Finally, try and make the final offer as fair and reasonable as possible, taking into account the needs of both parties. It’s also important to be clear and concise when making this offer, so that there is no misunderstanding.
Responses To The Final Offer
Once the other party hears your final offer, they will either:
- accept it;
- reject it;
- counter it with a final offer of their own.
In theory, if both parties lay down a final offer, it can lead to a standstill with the mediation being unsuccessful. However, if the opposition’s final offer is very close to your final offer, there is no harm in discussing out and mutually agreeing a joint final offer.
Receiving The Final Offer
To those on the other end who are receiving the final offer, I’d say take it very seriously. If all other solutions and routes have been discussed the chances are this is a final offer. If the final offer is financial in nature, rejecting it could mean missing the optimal settlement boat and you may end up taking home a lower sum or having to go through another route to get your desired sum and incur more costs.
You obviously don’t have to accept the final offer immediately. Think about it and its ramifications for the people in your corner.
There is no harm in offering a counter final offer, as long as it’s genuine and not try to undermine the opposition.
If you find the final offer serves no genuine purpose, then, of course, you can reject it.
Concluding Thoughts On The Final Offer
As I keep saying, a final offer can only be genuinely considered final when all other options have been discussed in detail. Giving a final offer too early makes it sound like you want the mediation to end quickly and thus hands the initiative to the opposing party.
Please be open, transparent, kind and honest and do everything in you can to reach a deal before the final offer. This way all parties involved will feel like their thoughts and opinions have been taken into account, makes the final offer more reasonable and acceptable.
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