Be non-rational (all the way to the bank).

That’s because the reasonable person will (at least in the context of negotiating contracts) prioritise getting the deal done over the small points.

Does that mean that a reasonable person always gets the worse deal in legal situations? Not always. Here’s an interesting example of how a reasonable person can pretend to be unreasonable to get the right result.

A few years ago I was approached by a client. He ran a 30-person business that was owed £40k by a large customer. The large customer had decided not to pay the £40k that it owed him. He had done everything required under the contract, but the large customer had had a change of policy. It no longer required his services, and it had simply decided not to pay the outstanding invoices.

It calculated – correctly – that it was not worth my client’s while to go legal.

He came to me in frustration. He had chased the customer repeatedly, but to no avail. He was owed £40k, but he couldn’t see how he could possibly get his money without incurring even more costs.

I explained to him that his customer had made an economic analysis. It had calculated that a rational economic operator would not go legal for a debt of £40k. It was simply not worth it.

I told him that the solution was to be non-rational. He should send them a letter stating that his position was based on morality and principle, had nothing to do with the economics, and he was going to come after them for the money whatever the cost.

They paid him a week later.