A Cockroach in the Soup and a Fly in the Ointment
How do you judge when a deal is fundamentally rotten?
In exploring different types of compromises and his book, ‘On Compromise and Rotten Compromises‘, Avishi Margalit compares what he called “cockroach in the soup” deals where a rotten clause spoils the entire agreement. ‘Fly in the Ointment’ clauses are where a suspect clause makes a deal flawed but not necessarily worthless.
A ‘cockroach in the soup’ clause infects the entire agreement. The acceptance of slavery in the American constitution was ‘the cockroach in the soup’. In the end it would take a civil war to resolve what the absolutist Lloyd Garrison slammed as an “agreement with hell”.
Historical examples aside, every dealmaker should lookout for a ‘cockroach in the soup’ - a clause that makes the deal fundamentally rotten.
‘Fly in the ointment’ clauses cause difficulties but they can be justified and usually resolved over time
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