6 Tips For Contract Negotiation
A contract is a binding agreement between two parties and can be for personal or professional reasons. The term agreement implies that both parties agree to the terms in the document. In order to come to a point of agreement, both parties will negotiate for the terms that are desirable to them. If the contract is for something personal, such as custody or visitation arrangements, there are personal feelings involved and it is difficult to separate your feelings from the negotiation. However, if the contract is for business, such as a vendor agreement, feelings can generally be taken out of the negotiations.
All in all, contract negotiations are the same no matter what the topic, or whether it is for personal or professional reasons. Both parties must agree to the terms and conditions of the contract before entering into the agreement.
Identify what you want: Letting the other side know what you want up front can reduce confusion and make the negotiation go faster.
Negotiation: The reason behind having a contract or agreement is for both parties to get what they want. If the agreement is not beneficial to both sides, then there is no reason to enter into the agreement. Both sides will likely take some risk to gain the desired revenue.
Compromise: Both sides will likely have to compromise on their wants and demands to ensure that the other side is also comfortable with the terms. There may be some specifics that one side won’t budge on, though. Both sides will have to determine of those demands are reasonable enough to comply with.
Understanding the legalese: If you are uncomfortable understanding the legal wording in a contract, it is suggested to find someone who does understand the wording. Signing a contract without understanding the wording is dangerous because you may be signing something that is not in your favor.
Remain professional: Becoming emotional, rude, or demanding during contract negotiations will only hurt your stance in the negotiation process. Remaining professional and on point with negotiations of contracts will increase your likeliness of obtaining more of what you want.
Tailor your approach: Each contract negotiation is as different is each individual who is negotiating the contract. The approach you take should be different as well. Tailor your approach to the negotiation based on the relationship you have with the other individual or company, based on your personality differences and compatibilities, and to how bad you need the contract.
No matter what the contract is for, be sure that you don’t sign anything until everything has been worked through, both parties fully understand and agree to the terms and conditions, and the contract has been reviewed by someone who understands what the contract means.