When Is It Reasonable To Not Negotiate?

WHAT IS A W.A.T.N.A.?

When negotiating you should not agree to anything that is worse than just acting unilaterally. This is why you must understand what you can do without the agreement of the other person. This understanding is sometimes referred to as the “Worst Alternative to a Negotiated Agreement” or “WATNA.” If you accurately identify and understand your WATNA it is a very useful tool to evaluate whether your agreement to a compromise or agreement is reasonable.

In the simplest sense, if an offer is less beneficial than your WATNA, you should not accept it.

A negotiation requires the consent of all the involved people. Before and during a negotiation, it is important to know why you are willing to negotiate. A meaningful resolution through negotiation involves everyone identifying their important interests and not being stuck in the trap of trying to achieve a specific position.

HOW DO I DETERMINE WHAT MY W.A.T.N.A. IS?

In the reality of a negotiation, determining your WATNA is more of a planning tool than an objective truth. There are assumptions built into every WATNA and, if those assumptions are inaccurate, an offer may in fact be better or worse than the WATNA.

The steps to determine your WATNA:

1. Identify the core of what you are trying to accomplish. 

2. Identify what the law permits you to do without the consent of the other person.

3. Identify what the chance is to successfully do what the law permits without the consent, or the active opposition, of the other person.

4. Identify the costs are of doing what the law permits if there is no support from the other person.

An example of determining your WATNA:

Here is an example of the determination of a WATNA, from the perspective of a strata lot owner that is requesting permission from a Strata Corporation to alter the common property to make a penetration in the building envelope to install a heat pump.

1. What is the core that they are trying to accomplish: They are trying to heat and cool the strata lot so that it is comfortable year-round and can adapt to the warmest temperature and the coldest temperature.

   
   

2. What does the law permit without consent: The law does not permit the making of a penetration in the building envelope, but it does permit the owner to use a heater and fans and, without a bylaw to the contrary, it does allow the use of an air conditioner that can be used through an open window.

   
   

3. What are the chances of success acting without consent: The chance of successfully using a heater and an air conditioner are high because the Strata likely will not care about this decision and has no legal basis to oppose it.

   
   

4. What are the costs of acting without consent: The costs may be significant both in money (having to purchase two or more appliances and pay the electric costs because of the inefficiency) and in convenience (having to store the appliances when not in use, having to install and uninstall the air conditioner).

Therefore, an owner that is negotiating with a Strata for permission to alter the common property should be able to assess any compromise or assessment by comparison to their WATNA.

For example, if the Strata is only willing to permit the alteration on conditions that limit the times during which a heat pump could be used and that prevents the strata lot from being comfortable year-round, an owner should consider using appliances.

Another example, is if the Strata will permit the alteration only in exchange for a significant payment that would make it cheaper to purchase and store appliances, an owner should consider using appliances.

WHAT IS THE RISK OF NOT CONSIDERING YOUR W.A.T.N.A.?

Without properly considering your WATNA, you will be at a disadvantage during a negotiation. Your WATNA allows you to understand whether a compromise is in your best interest and the process of considering your WATNA provides you with a tool to consider alternatives during the process of negotiation.

It is important to consider that your WATNA may change and evolve over time as you think of more possible alternatives or you develop a better understanding of what the law permits.