1. Resist the urge to be defensive. Understand very clearly that you cannot beat these kinds of people; they’re called “impossible” for a reason.
2. Accept the situation. Impossible people exist; there’s nothing you can do about it. You just need to find a way to deal with them.
3. Do not call out an impossible person. Bluntly stating the problem will not improve your relationship with them. Instead of reaching a place of reconciliation, he or she is likely become even more difficult.
4. Understand that it’s not you, it’s them. This can be surprisingly difficult, considering that impossible people specialise in shifting the blame.
5. “Detach, disassociate and diffuse.” Staying calm in the heat of the moment is paramount to your personal preservation. Remove yourself from the situation and treat it with indifference.
6. Don’t allow yourself to fall into the trap of getting angry. Chances are that anything you do or say while angry will be used against you in the future. So, do what you can to stay cool and in control.
7. Don’t get cornered. Avoid one-on-ones with this type of person. If possible, try and only deal with them in when others are around.
Source: http://www.wikihow.com/Deal-With-Impossible-People (Abridged)