Are You Really Going To Blow The Deal Over This?
That’s what the broker said to me a few weeks ago as I was negotiating the final points with the other attorney on a purchase money note for a small business deal. The broker wasn’t involved in the conversation. It was a simple e-mail exchange between the other attorney and me. At some point, the broker was copied in. My final comment was a small one. The attorney didn’t object. But it offended the broker as it might cost his client, the buyer, a whopping $150 at some point in the future. It was a technical point that the buyer had to pay, but, because the contract was silent, the broker was adamant. “Are you really going to blow the deal over this” he e-mailed me, with multiple question marks and exclamation points.
Why is it that the smallest deals cause the most grief? And, why is it that this type of thing always happens when clients don’t think to hire an attorney until after the contract is signed and closing is imminent? In this asset sale, the client called just 10 days before closing. Given the timing and the size of the deal, I probably should have referred her out to someone else. But, that’s a conversation for another day – I took the case. Reviewing the contract, it was clear that this seller should have called before ever signing. The broker did her no favors. It was too late to renegotiate the deal. I just had to make sure that she wasn’t taken advantage of any further. Thanks to Hurricane Irma, the closing was delayed about a week. Until this moment during the process to get to closing, there were no glitches.
Negotiations should not ever be construed by one side or the other as a ploy to blow a deal. Parties to a transaction should be free to seek out the best deal possible and to look for language in every document that best suits them. When a request is made by one side, the other side should be free to accept, reject or counter propose. Negotiation is give and take. There is compromise and ultimately there comes a point when both sides have to make a decision.
When the broker asked me if I was trying to blow the deal, it would have been easy to tell him off. I could have easily thrown his comment back in his face and made the point that he was the one who was killing the deal. But that would have served no purpose. Litigators like to quote the old adage, “when the facts support you, argue the facts, when the law supports you, argue the law and if neither supports you, distract.” I think that’s what this broker was trying to do – distract from the point as he had no argument to make. I had the better argument and taking the high road would get the desired result while making it clear to both the buyer and seller who was hurting the deal. By explaining to the broker that negotiating and requesting that provisions and language be inserted in a closing document is part of the closing process, I did not accept the premise of his comments. I then offered to allow the buyer to pay the potential liability up front at a small discount as a debit/credit on the closing statement rather than as part of the note on the maturity date when the liability would be determined. Clearly, I was willing to compromise and not kill the deal. The broker quickly backed off and accepted my original change and I never heard from him again.
Interestingly, the buyer’s attorney, who had not objected to my request initially, disappeared during this rapid exchange of e-mails. I wondered why he hadn’t simply told the broker that my position was correct, or not unreasonable and that there was no reason to worry and that I was not out to kill the deal. Did the attorney think he missed something and now was thinking he needed to save face?
Bullying in negotiations, which this broker clearly attempted to do, will get you no where. If you are bullied, don’t back down. It only means that the other side is grasping at straws and is in a weaker position. Use it to your advantage.