How to best deal with ultimatums

The negotiation has been going on for the greater part of the day and the atmosphere, while still being cordial, is tensing increasingly as an agreement on the final issues is not reached. Then all of a sudden your counterpart says something along the lines of:

"This is our final offer, accept it or we end the negotiation."

What do you do? Well first and foremost you need to make a quick evaluation of the situation. Do you want a deal with your counterpart? How is that final offer comparing to your BATNA? If you reach the conclusion that it could be worth trying to continue negotiations you can try any of the below two techniques. What they have in common is that they allow your counterpart to retract from the take it or leave it statement while still being able to save face. Ultimatums are often said spontaneously, stemming from frustration. And while your counterpart might regret the statement as soon as it was said out loud it is not possible for him/her to go back on it without losing credibility. That is why you need to be the one “rescuing” the person back to the negotiation table by either:

Acknowledge the situation for what it is by stating something along the following:

“I hear what you’re saying, but before we come to a point of ultimatums I would just like to make sure we have turned every stone to find a good solution for both parties. How about…”

2. Simply ignore the ultimatum and pretend you didn’t hear it by just continuing your chain of thoughts:

"I have an idea that might work for the both of us, what if…"