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The blurry lines of negotiation ethics: when "puffing" becomes misrepresentation

In-house counsel may unknowingly break the law

Assume that you are conducting negotiations on a supply contract with a customer. You and your business partner are engaged with your in-house counterpart and her business partner. During a break in the negotiations, your partner tells you that important cost data developed and used by the customer to establish its position on price is incorrect and permits your company to extract a higher price. Your partner mockingly states that the error is obvious but wants to make sure that you do not tip the customer off to their error.

When you rejoin the meeting, the customer’s in-house counsel innocently states, “Unless I’m missing something, this looks like a win-win result.” Quickly, your partner interjects that the deal looks good to him. The customer’s in-house counsel looks to you for your confirmation. Your partner readies his leg under the table for a swift kick in the event that you even pause. How do you respond?

Brian Martin

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