Negotiation is simply a dialogue between the two or more parties trying to reach an agreement and thereby avoiding the more traditional legal process. The ultimate goal of negotiation is compromise. Unlike mediation, negotiation does not have a third party. Nonetheless, it does exhibit some of the benefits that mediation has. For one, negotiation can potentially be lest costly – even more than mediation – because it can take less time and also does not require the mediator's legal fees. Secondly, negotiation keeps the control in the disputing parties' hands. So, ultimately the agreement is still reached under their terms and not a jury or judge's. A negotiation is even more confidential than a mediation, because there is one less party that knows the particulars of the meetings. But, negotiation may not always be more effective, because the mediator is a trained professional who is often able to facilitate a better conversation between the two disputing parties than what they could do themselves.
There are typically two types of negotiation: competitive and integrative. In competitive negotiation, the two parties act similar to adversaries and are competing to maximize their own gains. Often times this type of negotiation arises when a gain from one party always comes at the expense of the other party. An example of this is negotiating a car sale. Integrative negotiation is where the two parties act similar to partners and they are seeking to find a solution that is truly advantageous to both parties. Sometimes this is termed a 'win-win' solution. In this friendlier approach, both parties seek to find a solution that can be mutually beneficial.