Negotiation is the process of dispute resolution between parties, through mutual understanding

and agreement where there is no involvement of the third party. Negotiation is a contemporary
form of dispute resolution. It is a part of the ADR (Alternative Dispute Resolution) system of
resolving disputes out of court.

The Essential steps required for a negotiation to be successful are as follows:-

1. The voluntary consent of both parties to negotiate on the dispute.

2. The dispute concerns both parties in such a way that the parties are dependent on each other.
3. The parties should have the willingness to settle the dispute.
4. The dispute at hand should be negotiable.
5. In certain cases, there is a sense of urgency and deadline in the dispute leading to negotiation.

Advantages of Negotiation

1. Party based dispute resolution: One of the reasons for the absolute success of a
negotiation is that negotiation only involves the stakeholders and does not include any
other party as a result of which the negotiation process remains an absolutely private
affair.
2. Freedom of the Parties: Negotiations ensure that there is absolute freedom of the
parties. Freedom to set agendas of their choice and to ensure the objective of the
negotiation is achieved.
3. Consent of the Parties: This process ensures that the consent of both parties is taken into
consideration and that the individual interests are well looked after. The freedom also
ensures that there is no play of powers and all the parties in the negotiation are given
equal footing to speak and consider their options.
4. Successful Dispute Resolution: The negotiations have a possibility of greater successful
outcomes because it is ultimately based on the party’s interest and is entirely run by the
party’s consent to dissolve the dispute also the process of dispute resolution is suited with
that of the parties.
5. Strategy Oriented: By using the principled approach to the negotiations and considering
the various other strategies one can successfully conclude a negotiation process. The
parties can easily come to a win-win situation which is mostly the advantage of
negotiations all the parties in the negotiation are given equal footing to speak and
consider their options.
6. Voluntary Process: Negotiation is considered to be a voluntary process. However,
agents representing the parties can also take part in the negotiation process. There is no
interference of a third party in the negotiation process which leads to the proper safeguard
of the confidential information.
7. No third party intervention: The need for a neutral third party which is the
characteristics of most of the ADR systems is not the case with negotiations. This type of
ADR is mostly recommended in cases of highly classified information such as the case of
administration which if leaked through a third party would create havoc.
8. Comfortable process: The process of negotiation is safe. It normally is a speedy process.
The decision does not bind any other party other than the stakeholders. The process does
 not require witnesses. It is comfortable. There is not the third party imposing any order
over the parties. It is a completely self-built process.
9. Improvement in relations: After the successful completion of the negotiation rounds
such as in the international negotiations, there is an improvement in the relations of the
parties. The successful completion of negotiations further leads to the incentives of the
negotiations with the other countries as well. Thus facilitating the process of
negotiations on further occasions.

Disadvantages
Power Tactic: the parties to negotiation may not always be of equal stature and power. In the absence
of a neutral third party, the party which is in a position to dominate uses the scope to dominate over the
consent of the other party and thus come at an agreement. This play of powers thus is a disadvantage in
the negotiation process. The result may be an unfair agreement which later can be relegated to be
useless.

Unequal Agreement: The agreement that the parties arrive at the time of negotiation can be unequal
when there is one is a powerful party than the other.

Impasse: The dispute and disagreement between the parties sometimes lead to an impasse. An impasse
is a situation at the time of negotiation when the parties to an agreement reached a standstill in their
discussion, where they cannot proceed with their discussion any longer. It is a stage of the frustration of
the discussion of the parties wherein the parties where no possible successful outcomes can happen.
This generally happens when one of the parties is so adamant over its goals that no middle ground can
be achieved.

Walkout Situation: The walkout situation happens when an impasse frustrates the parties to the extent
that no fruitful discussion can happen any longer. The parties in such situations may storm out of the
room and terminate negotiations any further.

Strained Relations: The unsuccessful rounds of negotiations sometimes lead to bitterness in the

relationship. The parties are not ready to come for another round of negotiations and fail to reach an
agreement at all.

Backing off: The unsuccessful negotiations sometimes lead to the creation of bad relations along with
the termination of any other business and contractual relations all together afterwards. Some parties
sometimes lose confidence in the process of negotiation as a process of dispute resolution and consider
other options.

Not all issues are negotiable: There are cases that involve multiple stakeholders that are non-
negotiable. These cases directly go to court.