Ten top tips for a successful negotiation
Having a reasonable and legally robust contract to underpin your commercial relationships is vital to ensure that you build good relationships and grow your business. Whether the contract is with you customers or your suppliers and service providers the contract must give a clear picture of the rights and obligations of the various parties. Also the contract must be negotiated in the right time and help build commercial relationships (instead of damaging them).
All the above are not easy to achieve. What can you do to achieve this?
Here are ten top tips for a successful contract negotiation.
You need a good understanding of the risks involved so that you can consider
1. You need to understand your own requirements. This may seem easy but it is not. It requires clear communication with the teams, groups or divisions involved within the business to ensure all the various needs are represented at the negotiating table so that decisions can be taken accordingly.
2. You need to develop an understanding and be clear about what results you want out of the negotiation. Distinguish them in what would be nice to have and what is a must have. This must then be further developed by adopting a best and a minimum position.
3. You will need to be clear about what is negotiable and what it is not. You will also need to have clear escalation procedures for those points where it may be difficult to find a compromise.
4. You will need to be clear about the risks you may be assuming and come up with a fair allocation of risks and shared responsibility.
5. You will need to be able to look at the same problem from different points of view. From your own, your supplier you customer and be able to find an acceptable solution. However, be careful, at the end of the day you need to protect yourself. Understanding the other party’s argument does not mean necessarily agreeing with them.
6. Make sure you understand the cultural differences (if any).
7. Ensure that you try to understand the reason why the other party is making the comments they make.
8. Do not discount and prevent ideas that were not viable in prior contracting situations
9. Have a clear timetable and stick to it.
10. Ensure that the goal for all the contracting parties is the same and always clear: do business together.
To help business owners, managers and other non legal experts build on their negotiation skills, Anassutzi & Co runs an insightful and interactive seminar on drafting commercial contracts. “Your contract de-constructed: what your lawyer knows and is not telling you” promises to be a sold out event so if you do negotiate contracts as part of your role make sure you book your place now.
All articles are for general purposes and guidance only and do not constitute legal or professional advice.
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