The dos and don’ts of contract negotiations
Successfully negotiate and draft contracts for the sustainability and growth of your business.
Contracts are an essential element of any successful business, from initial establishment to continuing growth and advancement. No matter what type of contract is needed, it is vital to negotiate terms that meet the best interests of your business. It is equally important to foster positive relationships by reaching a fair compromise between all involved parties.
Below are some dos and don’ts to remember during the negotiation and contract drafting processes.
The dos: contract negotiation
- Do determine your goals and objectives before you negotiate.
- Do evaluate the options and position of all involved parties.
- Do pay attention to detail and documentation throughout the process.
- Do consider the other party’s needs and listen to their needs.
- Do stay calm and focus on the issues, no matter what happens at the negotiation table.
- Do immediately document agreements in writing.
The dos: contracts
- Do use plain language and avoid too much legalese.
- Do include the date in the beginning of your contract to make it easy to refer back to in the future.
- Do ensure the contract documents all agreements and all possible contingencies. Leave nothing vague or to chance.
- Do discuss any questions or concerns you have related to the contract with your attorney. It is better to confirm everything now than regret it later.
- Do have your attorney review and advise on the contract before you sign it.
- Do sign the contract in a colored ink, other than black, so the original copy is easily distinguishable.
- Do have all parties initial every page of the contract and do include notarization, if required by law.
- Do retain a copy for your records.
The don’ts: contract negotiation
- Don’t forget to fully prepare for the negotiation process.
- Don’t be afraid to ask for what you want, or state what you don’t want – and be specific.
- Don’t argue, but instead focus on calmly talking through disagreements.
- Don’t do all the talking. Instead ask open ended questions and give time for the other parties to properly respond.
- Don’t forget to note body language, and what it might be conveying.
The don’ts: contracts
- Don’t use form contracts. Instead adapt documents to suit your unique circumstances and goals.
- Don’t use overly-long sentences. Instead break thoughts down into easily-digestible sections.
- Don’t assume all parties define terms in the same way. If there is any doubt, include the definitions in the contract.
- Don’t accept oral explanations or 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.
For help at any phase of the contract negotiation process , turn to an attorney you can trust. He or she can help to ensure that your business is protected and assist with the negotiation and creation of your contract.