The buzzword in ZOPA is negotiation which is a prerequisite for the success of any entrepreneurial venture where two or more parties are involved. The US law makes it clear that no agreement would be possible outside the periphery of this intellectual zone discreetly carved out from a face-to-face meeting of the parties. The document should clearly postulate the proponent’s as well as the prospect’s views regarding the matter and then clearly outline the area which overlaps the two spaces consisting of the parties’ propositions. It may happen that none of the parties agree with each other and make an outright rejection of the propositions. It is then when the parties need to be vocal about their demands and talk it out. In that situation, the document must hold the propositions and the contradictions placed by each party in a balanced way.
The process usually starts with setting the maximum amount acceptable by the prospect and then slowly bargaining on the quoted amount until it reaches a mutually agreeable level. This is the seller’s reservation price where the line is finally drawn. Similarly, the buyer too sets his reservation price which is the minimum acceptable price and then bargains on to reach the final “walk away” price. In this way the range of expectations revolve around the walk away price for a possible or for a definite deal.