January 8, 2024

Power of Legitimacy

Let me provide you an example that illustrates a powerful negotiating tool — Legitimacy.

Consider a standard lease agreement for some rental property. Most people don't bother to read a standard lease before signing. They feel somewhat helpless in front of all that fine print. Standard terms and conditions exert a power of their own. I call this "the power of legitimacy."

When you sign the lease, you have probably agreed:

1. To let the landlord visit you anytime without notice.
2. To pay the rent even if the landlord doesn't keep his or her promises.
3. That the landlord can reject any prospective sublease tenant you find for whatever reason he or she wishes.
4. That if you have a claim for injury, you waive your right to collect from the landlord to the extent the law allows.
5. To pay the landlord his or her legal costs if he or she sues you, but if you bring suit, he or she pays none of yours.

Why in the world would anybody sign something like this? People do it every day. These standard terms are so ingrained in our landlord-tenant relations that one feels powerless to change them. They shift the balance of power to the landlord without even the dignity of a negotiation.

That's the way the power of legitimacy works. It hypnotizes you into compliance.

Both buyers and sellers use this technique to legitimatize terms and conditions, selling price, specifications, and more. The next time you are asked to accept the terms on the fine print of the contract, to follow a regulation or procedure, pay a listed price for extras, give additional credit terms, pay extra for a service contract, pay a surcharge or penalties, or give required discounts, watch out. These things are more negotiable than they appear to be.