Contracts are an essential component of any business, from initial startup to everyday operations to continued development. As such, it is vital to possess skills and knowledge of the contract negotiation process.
When negotiating contract terms, it is important to reach an agreement that is in the best interests of your business. At the same time, you want to foster positive relationships with business partners through fair compromise. Knowing what to do or not do during negotiations can help to achieve the above objectives, as well as avoid potential contract disputes.
Below are some dos and don'ts to remember during contract negotiations:
Contract negotiation dos
- Do determine your goals and objectives before negotiation begins.
- Do evaluate the options and understand the position of all involved parties.
- Do pay attention to detail throughout the process and thoroughly document proceedings.
- Do consider and listen to the needs of other parties.
- Do stay calm and focus on the issues, regarding what happens during negotiations.
- Do immediately document agreements in writing, have each party sign and notarize, if required by law.
- Do keep a copy of final contracts for your records.
Contract negotiation don'ts
- Don’t hesitate to state what you don’t want and be specific.
- Don’t argue. Instead focus on talking through disagreements.
- Don’t do all the talking. Instead ask open-ended questions and give time for proper response.
- Don’t forget to note the body language of other parties, and what it might be conveying.
- Don’t agree to modifications without getting them in writing.
- Don’t act in accordance with the terms of the contract until it is finalized by all parties.
- Don’t forget to protect your legal rights with help from an experienced attorney.