LR-301c · Module 2

Escalation and Impasse Resolution

3 min read

When a must-change provision reaches impasse — the counter-party will not accept your minimum tier and you cannot accept their position — escalation is the next step. Escalation is not failure. It is the recognition that the remaining disagreement is a business decision, not a drafting problem. The business stakeholders on both sides must decide whether the deal value justifies the risk, or whether the risk is a deal-breaker.

Do This

  • Escalate with a clear brief: what the provision says, what the risk is, what alternative language was proposed and rejected, and what the residual risk is if the provision remains unchanged
  • Frame the escalation as a business decision, not a legal opinion — "the risk is X, the deal value is Y, you decide"
  • Document the escalation decision — who decided, what risk was accepted, and what conditions apply

Avoid This

  • Escalate without exhausting the negotiation tiers — premature escalation wastes leadership time and signals inflexibility
  • Frame the escalation as "we cannot sign this" when the actual message is "this risk exceeds our appetite without business approval"
  • Accept an impasse without documentation — an undocumented risk acceptance is an unaccounted-for liability