Contract negotiations probably aren’t a new concept for individuals in businesses that involve signing agreements. But if you are a tenant looking for a house or a jobseeker getting into an employment contract, you may not be aware you have a right to negotiate the terms of an agreement to make it more favorable for you.
However, the contract negotiation process can be time-consuming and frustrating, primarily due to legal terms and procedures. The good news is that understanding the basics can help you avoid possible miscommunication with counterparties, unnecessary contract cycles, and unfavorable outcomes.
Understanding Contract Negotiations
Negotiating a contract calls for understanding some basics of a contract. During a contract negotiation process, the parties involved deliberate over the contract details to reach a legally binding agreement that satisfies them.
If you are very new to contract negotiation, it would be best to involve a lawyer in the process. An experienced attorney will help you understand what the different parts of a contract mean to you, including the benefits and the risks. However, whenever possible, you can go through the details of negotiating process alone and bring in a lawyer at the end to reduce legal fees.
Know Your Objectives and Goals
Typically, a negotiation boils down to two main factors; risks and revenue. Before getting into a contract agreement, you must know your key objectives. Assess the benefits and the risks of the contract while paying attention to its monetary benefits.
Depending on the circumstances of your contract, you may opt for higher risks for better returns or less revenue for a lower risk. It is also essential to have your bare minimums or deal-breakers before starting the negotiations.
Knowing what you want is not always enough. You must be able to defend your positions with credible data and information. Additionally, it would help to research the other party’s circumstances to understand their interests and concerns. That way, you can make compromises as you negotiate.
Give and Take
It is never a good idea to go to a bargaining table with a want-it-all attitude. Instead, you must be willing to give and take.
Additionally, keep emotions out of the negotiations. A good rule of thumb is to ensure that you take a business-like approach to discussions and acknowledge that you may get to the point of agreeing to disagree.
Be Careful with Embedding a Sign
A contract is only enforceable when all parties involved agree on the contents of the contract and embed their signs. This makes signing a contract a big deal. Unfortunately, most people rush to sign a contract without ensuring they have a complete understanding of its contents which can cause problems down the road.
Not all contracts follow fair industry standards. In some cases, contracts may have provisions that allocate risks and liabilities disproportionately to one party. That is why it is important to involve a lawyer before embedding your sign on a contract agreement. A skilled business lawyer can help you understand a contract clearly and thoroughly.