How to Negotiate Contracts
from wikiHow - The How to Manual That You Can EditA contract is a legally binding agreement between 2 or more parties to uphold terms in a relationship as set forth by the contract. Contract negotiation involves the process of discussing and compromising on contract terms in order to reach the final, approved draft of a contract. Some contracts are non-negotiable, as is usually the case with leases and manufacturer warranties. However, there are contracts - like business, real estate and financial contracts - that may be negotiated in order to reach terms that are satisfactory to all parties involved. Follow these guidelines for how to negotiate contracts.
Steps
- Identify your objectives for entering into the contract. Before you attempt negotiating a contract, you need to have a specific idea of what your desired outcome is. For example, if you want to lengthen the contract period, then you should know exactly how long you would like the contract period to be. Make both a list of things you will compromise on and a list of terms you are not willing to negotiate.
- Research contract laws in your area. Because contracts are legally-binding documents, many contract terms are regulated by the government. For example, it is not legal for a landlord to contract a tenant to inhabitable living conditions. Before you go into contract negotiation, schedule a free consultation with an attorney who specializes in contract law, or search online for a legal advice site where you can verify that the terms of your contract are within legal parameters.
- Prepare for the negotiation.
- Get any facts, figures and documents you may need to back up your negotiation points.
- Create a checklist of items that you want to address. When you negotiate a contract, it helps if both sides agree to this itinerary before the negotiation session begins.
- Set a time frame within which to reach an agreement on terms. Create a plan for the possibility that both sides cannot agree on terms within this time frame. For example, you may agree to schedule a mediation after 2 failed contract negotiation meetings, or to withdraw the contract altogether.
- Build trust with those you are negotiating with. This will help you reach an agreement faster, and with less resistance and time-consuming inquisition. To build trust, fully disclose all of the facts surrounding your contract negotiation requests, provide documentation of any facts or figures you use to support your requests, communicate openly about your interests and be receptive to the other party's counter-presentations.
- Approach the negotiation with a positive attitude. This will promote cooperation and aid both party's openness to mutually beneficial solutions.
Tips
- In order to speed the contract negotiation along, and to have a record of exactly what terms you asked for during negotiations, you may want to create a rough draft of the contract, with the modifications that you are requesting, before you go into negotiations. This can help ease objections for people in the other party, as it also allows them to see what they would be signing off on, rather than just relying on their perception and interpretation of what you have to say.
Warnings
- When you negotiate a contract, avoid trying to cheat the other side out of a fair deal, or attempting to trick the other side into agreeing to your terms by giving them false, inadequate or misleading information, or by using scare tactics. This creates an atmosphere of mistrust, and is counter-productive to reaching a resolution.
Sources and Citations
- http://smallbusiness.findlaw.com/business-forms-contracts/business-forms-contracts-overview-writing.html
- http://www.googobits.com/articles/p5-2667-how-to-successfully-write-and-negotiate-a-contract.html
No comments:
Post a Comment