How to answer "Can you tell me about a time when you had to negotiate a difficult contract or agreement?" (with sample answers)

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This post is part of our series on behavioral interview questions.

Why Employers Ask This

Employers ask this question to evaluate a candidate's negotiation skills. Negotiation is a crucial skill in most professions, and the ability to negotiate well can help determine the success of a company. Negotiating a challenging contract or agreement can be complex, and employers want to know how you handle difficult situations involving bargaining, persuading, and compromising. They also want to assess how you manage stress and communicate ideas effectively.

Additionally, in the interview process, the employer wants to ensure that they are hiring someone who can bring value and impact to the company. A candidate's ability to solve complex problems, take initiative, and come up with creative solutions is oftentimes demonstrated through their ability to negotiate effectively. Therefore, being able to tell the interviewer about a successful negotiation experience can be a great opportunity for job seekers to showcase their skills and experience.

How to Answer the Question

The best way to answer this question is by following the STAR method. STAR stands for Situation, Task, Action, and Result. By using this method, you will be able to provide a detailed response that highlights your negotiation skills and demonstrates your ability to handle difficult situations successfully. Here's how you can incorporate the STAR method in your response:

  1. Situation: Start by explaining the context of the negotiation. Provide a brief background on why the negotiation was challenging and why it was important.
  2. Task: Explain your role in the negotiation. What was your responsibility, and what were you tasked with accomplishing?
  3. Action: Explain the steps you took during the negotiation process. What strategies did you use? How did you prepare? What kind of communication skills did you utilise? Be sure to highlight any unique or particularly successful approaches to the negotiation.
  4. Result: Describe the outcome of the negotiation and the achievements you made. Be sure to convey how your effort added value to the company and why the outcome was significant.

Remember to be specific and use concrete examples when you are answering this question. Avoid using generic or vague statements that do not provide detail or clarity to your response. Also, make sure to emphasise how your negotiation skills can benefit the company you are interviewing with, and demonstrate your ability to adapt to change and excel in challenging environments.

Sample answers

Bad answer:

Uh, I'm having a hard time remembering a specific example, but I did have to negotiate a contract once. It was pretty difficult, but I think I did a good job.

This answer is bad because it lacks details and specific examples of the negotiation. It also shows a lack of preparation for the interview and may make the interviewer doubt the candidate's negotiation abilities.

Good answer:

During my previous job, I negotiated a contract for a new vendor to provide services to our company. The vendor initially presented terms that were not favorable to us, but after several rounds of negotiations, we were able to agree on a contract that worked for both parties. I had to balance both our company's needs and the vendor's interests while keeping the lines of communication open and respectful. The end result was a successful partnership that provided high-quality services for our company at a fair price.

This answer is good because it provides a specific example of a difficult negotiation and highlights the candidate's ability to negotiate effectively while keeping both parties' interests in mind. It also shows the positive outcome of the negotiation.

Bad answer:

I'm not really comfortable negotiating contracts, to be honest. I prefer to leave that up to someone else and focus on my own responsibilities.

This answer is bad because it demonstrates a lack of confidence in the candidate's negotiation skills and a lack of willingness to take on new challenges. It may not inspire confidence in the interviewer that the candidate can handle difficult negotiations.

Good answer:

When I was working at XYZ Company, I negotiated a contract with a difficult client who was having trouble meeting their deadlines. I empathized with their situation and suggested a compromise where we extended their deadline while still meeting our company's needs. We also discussed clear communication channels and expectations to ensure that the project would move forward smoothly. By the end of the negotiation, we had a clear agreement that was acceptable to both parties and allowed us to move forward with the project successfully.

This answer is good because it demonstrates the candidate's ability to empathize with the other party and suggest creative solutions that benefit both sides. It also shows an ability to manage expectations and communicate clearly, which is essential for successful negotiations.
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