Partnership Chair
Contracts are used in all areas of business. Mistakes and errors in a contract could result in costly litigation and liability. While it is crucial to work with an experienced North Carolina business attorney to draft ironclad, comprehensive business contracts, it is equally important to negotiate contract terms and conditions that are in your company’s best interest. Let’s look at five tips for success when negotiating business contracts.
Take Control of the Negotiation Process
Controlling the details for negotiations gives you an advantage. When you schedule the meeting, you choose what topics to discuss and in what order. Therefore, you have the opportunity to frame issues to give your company the greatest benefits and more power during negotiations. Furthermore, you are in control of the schedule, so you can decide the timeframe for each meeting and how long to wait between meetings.
Perform Due Diligence and Research
Before negotiating with another party, research all aspects of the transaction. The more you know about the other party and the details of the transaction, the more leverage you have when negotiating. For example, if you know that demand for a product the company manufactures is decreasing, you have more bargaining power when negotiating a buy-sell agreement.
You also need to understand the laws and regulations that may impact the agreement. For instance, you must understand state and federal labor laws when negotiating an employment contract.
Create an Agenda and Priority List
Before entering contract negotiations, you should have clear objectives for the final agreement. Create a priority list outlining what you insist upon for the final contract. Realize that no contract is perfect, and you will likely not get everything you want. Choosing your battles carefully by identifying areas open to compromise can help you protect non-negotiable terms.
It is also helpful to create an agenda for meetings. The agenda ensures you do not overlook critical topics to discuss and helps the discussion remain focused and ordered.
Schedule Contract Negotiations in Phases
Negotiating a complex business contract in one meeting can be overwhelming. It is also unrealistic in most cases. Getting another party to agree to all the terms and conditions you want may take time. It may also require you to compromise on some terms, so you may need time to review your priorities and regroup.
It can be more beneficial for your purposes to break contract negotiations into phases. The parties work on a few sections at a time. The smaller agreements you reach make up the final contract.
Understand the Other Party’s Position
Before entering business contract negotiations, try to learn as much as possible about the other party’s goals, priorities, and interests. Understanding a party’s goals and motives helps you devise a negotiation strategy that gives you a better chance of obtaining what you need while accommodating the other party.
Call to Schedule a Consultation With Our North Carolina Business Attorneys
Negotiating favorable business contracts is a fundamental key to your business success. Our North Carolina business attorneys at Patrick, Harper, & Dixon handle all aspects of contract law, from negotiating contracts to litigating contract disputes. Contact our office to schedule a consultation with one of our experienced business lawyers.
