Tips for Negotiating and Signing an Important Contract

contract negotiation tips

Whether it’s a new job, buying a car, or entering into a business agreement, negotiating can seem like an arduous, stressful, and, sometimes, awkward task. According to Webster’s dictionary, negotiate means “to confer with another so as to arrive at the settlement of the matter.” Since you have to work with another, negotiation inherently requires compromise, which usually requires each party to make concessions in order to reach an agreement. Optimally, you want to add the terms to the contract result in the best deal for you and eliminate the provisions that expose you to unnecessary risk. At the end of the negotiation process, you want to be sure that you have negotiated the best deal for yourself, for your business, and/or for your client. Here are a few things to consider as you negotiate, before you sign on the dotted line: 

Read the Contract 

First, read the contract. Then, re-read the contract. You get the point, right? While this may seem obvious, favorable terms often get left out and hidden terms tend to sneak in when the contract is not read thoroughly. Every word is important, and you need to know exactly what you are binding yourself, your business, and/or your client to. Identify your must-haves, nice to-haves, the things you don’t care about, and the things you won’t accept before you start negotiating. As you read through the contract, mark it up accordingly. 

It’s Okay to Negotiate 

Even if you are an individual consumer entering into an agreement with a larger company, don’t be afraid to negotiate. Most parties, including larger companies, will often negotiate contract terms. If the other party to the agreement drafts the first agreement, view it as just that--a first draft. Be reasonable and be prepared think and talk through mutually acceptable solutions. While getting every single thing you want in a negotiation is ideal, having to compromise in a negotiation is not losing and does not indicate failure. Concessions garner good faith, which fosters more productive and favorable negotiations. 

Get Professional Help 

While you may think you know everything you want in a contract, you don’t know what you don’t know, and you may not know how to write or review a contract in a way that is most beneficial to you. Regardless of how comfortable you are negotiating, it is always smart to have an attorney review an important contract before it is signed to ensure that it complies with the agreement negotiated. Contracts are binding legal documents, and breaking them can have major consequences, such as litigation, judgments, etc. Putting contracts together and reviewing contracts can be long and complicated process. Plan ahead and know when to seek help. 

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Posted - 05/06/2016