P ROGRAM ON NEGOTIATION AT H ARVARD L AW S CHOOL

AN INTER-UNIVERSITY CONSORTIUM TO IMPROVE THE THEORY AND PRACTICE OF CONFLICT RESOLUTION

THE BULLARD HOUSES

DRRC Version

Teaching Notes

In this exercise, there should be no agreement unless: (1) the representative of Absentia,
the potential buyer, lies about Absentia’s planned use of the property; or (2) Absentia’s
representative violates Absentia’s instructions not to disclose the planned use of the property, and
the representative of Downtown, the seller, finds that use acceptable to the Downtown
shareholders; or (3) Downtown’s representative loses sight of the sellers’ fundamental interest in
insuring that their ancestral home is used for "tasteful" purposes by a reputable purchaser. If the
Absentia representative follows Absentia’s instructions not to disclose the identity of the owner of
Absentia or the intended use of the property, the Downtown representative cannot be certain that
the property will be used for tasteful purposes or that the buyer is reputable. In sum, the best
outcome of the negotiation, if each negotiator remains faithful to his principal’s instructions and
interests, is that no agreement will be reached. The best deal for these negotiators under these
circumstances is no deal.

This outcome comes as something of a shock to most students in a negotiation class. They
will most likely have done several exercises in which their creativity in reaching agreement under
difficult circumstances has been praised, and they will have struggled mightily to reach agreement
here. Some may even have done so, and, particularly the sellers, will have congratulated
themselves for their persistence and creativity. The realization by each negotiator that careful
attention to the principal’s instructions and interests should lead to no deal, and that, under these
circumstances, each has a BATNA which is better than anything offered by the other, sometimes
comes as quite a surprise. It is a useful antidote to the "agreement at any cost" mentality that
often pervades a negotiation class, and powerfully teaches the concept of focusing on one’s
BATNA.

A rather simple line of questioning is usually sufficient to bring out the central lesson of
this exercise. I ask the Downtown representative in each pair of negotiators that reached
agreement:

• What will you tell the Downtown shareholders when they ask you:

• Who did you sell our ancestral home to?

This version of Bullard Houses was written by the Dispute Resolution Research Center at the Kellogg Graduate School of Management. This version
is based on a case created by Ron Karp and revised by Mox Tan, David Gold, Andrew Clarkson, Paul Cramer, Douglas Stone, and Bruce Patton for
the Harvard Negotiation Project. Copies of the original version are available at reasonable cost from the Clearinghouse, Program on Negotiation,
Harvard Law School, 518 Pound Hall, Cambridge, MA 02138. Telephone: 617-495-1684, Fax: 617-495-7818. This case may not be reproduced,
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usefulness of this case by keeping it confidential. Copyright © 1983, 1985, 1986, 1988, 1991, 1995 by the President and Fellows of Harvard College.
All rights reserved. (Revised 10/19/95.)
 THE BULLARD HOUSES – Teaching Notes

• What are they going to do with it?

The Downtown representative should not (if the Absentia representative has followed
Absentia’s instructions) be able to provide definitive answers to either of these questions. Since
these questions go to the heart of the Downtown shareholders’ interests, it quickly becomes
apparent that the Downtown representative has not furthered those interests, and that he would
have been better advised to go to his BATNA, whether that be regarded as the offer from
Wimbledon, Gentrification, or Grouse.

If the Downtown representative has learned either the identity of the seller or the planned
use of the property, the Absentia representatives who disclosed should be questioned about why
they did so. Typically, they will have disclosed on the basis of a promise of non-disclosure by the
Downtown representative that she will not disclose to anyone else. This raises the issue of the
need for fidelity to the principal’s instructions, and the importance of discussions with the principal
before varying from those instructions.

In every negotiation the Absentia representative will (or should) have been faced with
questions about his principal’s identity and the planned use of the property. Some will have
attempted to deal with those questions by evasions and half-truths, some may have lied, some will
have turned the question around (Why do you want to know?"), and some will have said they
were unauthorized to reveal any information about use.

Asking the Absentia representatives how they dealt with these questions leads to an
interesting discussion of the comparative importance of furthering the principal’s interest in getting
the deal done and the negotiator’s interest in preserving his integrity. I typically suggest that half-
truths are dangerous from both perspectives, and that the most satisfactory response would be, "I
am not authorized to answer that question (protecting the negotiator’s integrity), but tell me what
you are concerned about, and I’ll see if I can deal with your concerns" (trying to get the deal done
by focusing on the questioner’s interests).

Another valuable line of questioning is to ask the Absentia representatives if they were
adequately prepared to answer questions regarding identity and use, what they had planned to say,
whether they had follow-up answers, etc. I here make the point that a good negotiator will have
thought in advance about information she does not want to disclose, and will have decided how to
deal with requests for that information. It is the unprepared negotiator who often discloses
inadvertently or lies because, on the spot, he can think of no other way to avoid disclosing
sensitive information.

Another area of inquiry, directed to the Downtown representatives, is whether they

disclosed to Absentia the amounts of the competing offers. Whether they have or have not, I ask
"why?", and typically discover that several students have no carefully thought-out response. I then
ask, "How should you decide whether or not you want to disclose information to the other side?"
This leads to a discussion of the vital importance of information in negotiation. Ultimately, I make

Copyright © 1983, 1985, 1986, 1988, 1991 and 1995 by the President and Fellows of Harvard College. All rights reserved. 2
 THE BULLARD HOUSES – Teaching Notes

the point that the key issue in contemplating disclosure of information is whether such disclosure
is likely to help or hurt the negotiator’s prospects of achieving her goals in the negotiation. While
that is not always an easy question to answer, the cardinal sin is not attempting to do so, but
rather disclosing information simply because the other side asked for it.

If you have observed the negotiation, live or on videotape, you will often see some
Downtown representatives asking quite good questions about the identity of the buyer or the
intended use for the property -- but not listening carefully to responses which are revealing to the
careful observer. This can lead to a useful discussion of the importance -- and difficulty -- of being
an attentive listener as well as a diligent questioner. Law students, in particular, are often very
good questioners, but their failure to listen carefully to the responses undercuts the value of their
questions.

Copyright © 1983, 1985, 1986, 1988, 1991 and 1995 by the President and Fellows of Harvard College. All rights reserved. 3