The first issue in developing your theory is what is the bottom line; what is the minimum your client will accept; and what is the maximum the other party will give. The gap between the bottom lines of both parties can sometimes be narrowed by adding cost of delays and other associated costs. In determining the other side's bottom line, information is needed. Negotiation generally does not include discovery; therefore, the other party's records are not available to you unless both sides agree. (Discovery is part of the pretrial process where both parties request and review ten times too much material from the other party looking for that "smoking gun" to win the case.) Through research, you may find that the other party may not mind paying your claim; however, it just is not possible based on his latest financial statement. Your goal then would be to negotiate a settlement with that in mind; the prospect of a future settlement may be better than refusal to reach any settlement.

The best weapon a negotiator has is his ears. When he meets the other side, he must develop the art of listening. He must actually hear every word the other party is saying. There will be time to dissect the information later. If the negotiator listens, he may find that the other party is merely frustrated. Maybe the real issue is the neighbor's complaints and your time overrun is just exacerbating a bad situation. The claim may not be about liquidated damages; the owner may just want to appear to have control over the project.

A theory determines the real issue - whether or not the item you are discussing is even the crux. The other party may be using your part of the negotiations as part of a larger negotiation pattern. You can spend a lot of money and it can just be over a side issue - a diversion. A good negotiation generally will not make either party happy, but both parties should feel they got the best possible resolution considering all factors. Settlement is much harder if one party gives the appearance of combativeness. After listening, the negotiators should bring all items to a head and reach a resolution. Negotiations require careful listening, intuition, and perception. Sometimes the parties may want cash, or recognition, or acknowledgment of their contributions, or sometimes it is a face saving matter. Negotiations are very seldom nailed down to just strictly a percentage split of monetary considerations. Even in monetary cases, the gap may close quicker with non-cash settlements - stock, contracts.

Negotiation, as a rule, is generally practiced directly by the two parties involved; sometimes the engineer acts as a negotiator bringing both parties together. The project engineer is closely associated with the Owner or may be perceived as partly protecting his own firm. At this point bringing in an outside negotiator or mediator may be in everyone's interest.