You walk into a negotiation hoping the other side will be honest about their position. They assume the same from you. This is the expectation that sits at the heart of good faith negotiation.
Here's the challenge: negotiation students say that their main difficulty when entering a negotiation is potentially aggressive, secretive, or deceitful behavior by their counterpart*. In other words, they fear that they will engage in a bad faith negotiation.
If you are also uneasy about this, we have good news. There are concrete strategies to ensure you engage in good faith negotiation, backed by decades of global experience. Let's unfold what this looks like in practice, along with some of the benefits.
Good faith negotiation is a structured, honest trading process. It means that you enter discussions with a real intention to reach an agreement and avoid intentionally misrepresenting information.
The concept of "good faith" has legal roots. In the United States, contract law recognizes an implied duty of good faith and fair dealing in the performance and enforcement of contracts. This extends to the Uniform Commercial Code (UCC), where parties are expected to act with honesty and follow reasonable standards of fair dealing in commercial settings.
While some negotiators may intentionally negotiate in bad faith, this is not a good strategy. In fact, trying to "one-up" the other party is more likely to backfire and have long-term negative ramifications. Here are some advantages of doing it the fair way.
Nearly half of negotiators say they lack confidence when approaching the bargaining table. When you know where you stand with a fellow negotiator, though, it is easier to enter the negotiation with poise. Good faith means you can agree on a set structure and know that both sides will adhere to it, which can help you manoeuvre the negotiation with control.
Negotiation experts at Scotwork discovered that only 21% of negotiators believe relationships are strengthened at the end of a negotiation. That is a concern. Mutually satisfying dialog is essential if you want to build quality long-term relationships. Partnerships can only thrive if each party respects the other. Take two friends deciding where to go for dinner: one may communicate that they are on a budget in good faith that their friend will suggest a more affordable restaurant.
Think about the last agreement you signed that later caused frustration. Often, the issue is not price—it is assumptions and unspoken expectations. This is not uncommon! Scotwork Capability Survey found just 15% of negotiators establish at the outset what the other party wants. That means most people argue their case before fully understanding the other side. When you really listen to each other, you are more likely to hear and understand what the other party actually wants.
Negotiators who only seek to take value rather than trading it run the risk of deadlock. In most cases, it doesn't work, and in the end, they gain nothing at all! If they do succeed, it is typically not worth the sacrifice. Picture a child who refuses to do homework, rudely demanding more screen time. In response, the parent removes screen time entirely for a week. If they had made a calm request for a family movie night in exchange for homework completion, the child may have achieved their aim.
It is a myth that aggressive negotiators extract more value. In reality, unstructured pressure often leads to deadlock and damaged relationships, which may cost more financially in the long term. On the flip side, when negotiators combine active listening with a multi-offer approach, they are more likely to achieve joint economic advantages, according to Sage Journals.
In a negotiation, you cannot control the other side's intentions or responses. But with the following best practices, you can level up your own preparation and structure the process to increase your chances of success.
Preparing an opening statement and knowing the most important things to communicate about your position helps to provide clarity and present you as a trustworthy negotiating partner. The other side of preparation is researching the other parties' needs and desires. You may not be able to meet all their demands, but having an idea of them in advance shows respect while helping you to prepare reasonable responses.
A good faith negotiation doesn't mean that you need to spill your guts and lay everything out on the table all at once. You can be honest with information sharing while initially holding back specific pieces of strategic information, as appropriate. For example, you may wish to first gauge your counterparty's financial situation before indicating flexibility on cost.
In an ideal world, the other party will also desire a good faith negotiation. This is not always the case. In a bad faith negotiation, your counterparty may, in fact, be a "false negotiator," meaning that they do not intend to trade value but are negotiating with ulterior motives. In The Scotwork 8-Step Approach©, the Argue and Signal stages are designed to surface motives, constraints, and power balance before proposals are finalised. This prevents superficial agreements that unravel later.
Good faith does not mean undue generosity. It means discipline, a clear give-and-take where value is traded fairly. Don't say, "We can reduce the price." Instead, try, "If we reduce the price by 3%, we would need a 24-month commitment in return." Conditional trading is bargaining with boundaries, which works to encourage reciprocity while protecting your margins.
When a proposal is rejected, many negotiators assume the answer is either to concede or to argue harder. Compulsive reactions of this kind are rarely good for the negotiation; we advise re-packaging as a more effective route. If your proposal is rejected, ask what needs have not been addressed, what variables you can combine, and how you can reshape the deal without increasing cost.
A deal is not finished when you shake hands on it. Both sides must share the same understanding of the deal to make it a definitive agreement. Once you have clarified the details and both parties agree to a contract or decision, it is time to get it in writing. In long-term agreements, it is good practice to include a renegotiation clause for "wiggle room" that is above board.
In general, a fair negotiation should not need a referee. But sometimes, even when both sides are acting in good faith, a third neutral arbitrator is necessary. This might happen when the negotiating parties fail to communicate clearly, or a deal requires renegotiation. The Singapore International Arbitration Centre (SIAC) exists for this reason, and it has, for example, helped American companies resolve cross-border disputes in sectors such as intellectual property and technology.
Good faith negotiation is not about being soft. It is about being structured, disciplined, and clear in your intent to reach an agreement that works. That takes skill. Unfortunately, most professionals never receive formal negotiation training. They learn through trial and error and rely on instinct, not structure.
At Scotwork, we train professionals to negotiate with confidence and control, with tried and tested strategies that transfer across work and personal life. Get in touch today and discover how optimized negotiation capabilities can improve your deal outcomes.
