Four Practical Negotiation Guidelines for Your Business Contracts

Law Blog

When making a business deal for your young company, negotiation is an important practice. This process will allow you to discuss the specific details of the transaction with the other parties. The objective is to reach an agreement that the all involved businesses and individuals will find acceptable. If you are a beginner in contract negotiation, consider using the outlined guidelines to achieve the best results for your commercial operation.

Plan the Negotiation in Sections

Commercial contracts can be overwhelming because numerous issues must be considered before reaching an agreement. However, one of the common problems which can cause the premature disintegration of the negotiation is attempting to cover all the details at once. You should remember that commercial contracts are not all or nothing agreements. The other party is unlikely to agree to all your preferred conditions and terms. Therefore, plan the negotiation into smaller sections so that you will be able to discuss crucial aspects of the contracts independently. 

Focus on Fair Terms

Young companies do not have much leverage when making business deals. Therefore, you should not ask for unreasonable terms and then hope that the other party will negotiate until you get what you originally wanted. Instead, focus on getting fair terms for the potential work, according to the industry standards. This approach is favorable for inexperienced negotiators because you will not be obligated to justify your stated standard terms. The other party must take the burden of providing concessions if they would like to be exempt from the normal contractual conditions.

Prioritize Important Issues

Business contracts involve different types of risks and potential revenues for companies. However, all these matters are not equal in their importance. You should know your primary objective that you would like to accomplish through the agreement. Organize the different issues in order of their significance. This ranking system will help you identify where concessions are possible and the terms which you cannot afford to compromise.

Control the Process

Finally, you should note that having control over aspects of the negotiation process can help you gain an advantage over the other party. Therefore, do not be carried along by the natural tide because you might miss out. Where possible, your business should draft the contract because it will allow you to raise issues which are important to your company. You should also seize some control over the topics to be discussed during the meetings.

For ideal results, you should engage an experienced commercial lawyer to provide guidance.


21 April 2017

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