123rf13106977 bothThe Law of Authority says: You can only negotiate successfully with a person who has the authority to approve the terms and conditions you agree upon.

[quotes]One of the most common of all negotiating ploys is called an “agent without authority.”[/quotes] This is a person who can negotiate with you but who is not authorized to make the final deal. No matter what is agreed upon, the agent without authority must check back with someone else before he can confirm the terms of the agreement.

The first corollary of this law is: “You must determine in advance if the other party has the authority to make the deal.”

The simplest way to do this is to ask the person if he or she is authorized to act for the company or client. If it turns out that he or she is not, you must be cautious about the positions you take and the concessions you offer.

[quotes]The Russians were notorious for sending agents without authority[/quotes] to international negotiating sessions over arms control, trade or foreign relations. The Americans would send negotiators who were empowered to enter into agreements while the Russians were only empowered to accept concessions. Who do you think got the best and the worst of these sessions?

The second corollary of this law is: “When dealing with someone who cannot make the final decision, you must represent yourself as being unable to make the final decision either.”

[quotesright]Fight fire with fire.[/quotesright] If the other person says that he cannot make the final decision, you tell him that you are in the same position. Anything you agree to will have to be ratified by someone else. This tactic levels the playing field and increases your flexibility in the case of an unacceptable counteroffer.

How you can apply this law immediately:

  1. Make every effort to find out who makes the final decision before you begin negotiating. Ask the person you are talking to if he or she is empowered to enter into an agreement based on what you discuss. If not, find out who is and attempt to speak to him or her directly.
  2. When you cannot deal with the final decision-maker, do everything possible to find out exactly what he or she will find acceptable in making this decision. Be sure to mention that you will also have to get final approval before you can make an irrevocable decision to proceed. Keep your options open whenever possible.