Four Tips for Negotiating Contracts

Negotiating a good business contract can be a difficult balancing act between demanding too much and asking for too little. It’s tempting to insist on everything you want, but adopting a scorched-earth approach might cause the other party to abandon the negotiations altogether. Even if they do sign the deal, you might be creating unnecessary problems for yourself down the road because people who are deeply unhappy with the terms of an existing contract will be quick to take their business elsewhere at the earliest opportunity. On the other hand, if you give up too much during negotiations, you may wind up paying more than you should for what you need or hampering the operations of your business. Here are some tried-and-true strategies to help you strike the right balance:

1. Ask questions rather than stating demands or hardening your stance. Digging in and arguing is a surefire way to deteriorate negotiations. Instead, ask questions designed to help you understand the other party’s position better. This opens up the process, allows discussion to flow more freely, and cools rising tempers. It can also yield valuable information about the other party’s needs and wants that might help you strike a better bargain for both sides.  

2. Give credit where credit is due. Don’t miss small opportunities to agree with the other side when you can do so without compromising your position. This helps foster good will and a collaborative spirit during discussions.

3. Segregate parts of the negotiation. Haggling over the entire contract is one sitting may save a little time in the short term, but it can create problems later on. Allotting a limited amount of time to negotiate everything creates the kind of pressure that might tempt you to rush through sections, make hasty decisions that are not in your best interests, or become too discouraged if progress is slower than anticipated. Breaking the process into bite-sized pieces can make it feel less overwhelming and improves your chances of completing the negotiations on good terms with the other party.

4. Facts, not feelings. In Getting to Yes: Negotiating Agreement Without Giving In, a highly regarded guide to negotiating business contracts, the authors suggest that a sober, straightforward negotiation process with little emotion is most effective. In general, avoid saying “I think,” “I feel,” or “I believe.” Use verifiable facts to back up your assertions whenever possible. Tamping down your emotions will help you think more clearly and present your position much more compellingly as well.

Let Us Look Over Your Contract

Before you sign a contract, it is a very good idea to have an experienced business attorney review the terms. They can provide guidance regarding the potential pitfalls to avoid and supply the language needed to best protect your interests. At Integrated General Counsel, we have negotiated countless strong contracts for our clients, and it would be our pleasure to assist you too. Reach out to us at (925) 399-1529 or visit our website today.

Written by Integrated General Counsel

Our focus includes handling a variety of corporate matters and also includes litigation in state and federal courts. Our current practice includes providing transactional services and representing a variety of small and medium-sized companies as their outsourced general counsel.