Contract negotiations can feel like a drawn-out, frustrating process. The good news? They don’t have to — with planning and preparation, contract negotiations can be smooth sailing. Consider these tips for reaching a successful negotiation.
- Start with a draft. Before authoring a formal contract to negotiate, ensure you and the other party agree on the main points of a contract. Use a straightforward term sheet. If it gets too complicated at this point, go back to the beginning and start on new terms.
- Break it down. Getting one party to agree to wide swaths of a contract isn’t realistic. Break the contract into pieces that can be agreed upon separately. These smaller agreements will make up the larger contract, and this strategy will help avoid the “all-or-nothing” approach to contract negotiations.
- Keep it simple. Complex contracts with lengthy detail and nuance will further complicate negotiations. Start with simple and clear terms that everyone will understand, even if it avoids some of the more nuanced advantages of complex contracts.
- Know your “why.” Understand why you want to do business with the other party. Go beyond the competitive or aggressive mindset of getting the most out of the contract and aim to work collaboratively. How can this relationship benefit both parties?
- Prioritize. Go into a contract negotiation process with a keen understanding of your top priorities from the arrangement, as well as how other risks or rewards rank after your initial needs are met.
- Ask questions. Get to know as much as you can about the other party’s interests and goals before starting a contract negotiation. By understanding that business’s motives and needs (or pain points), you can better align your negotiations with moves that support your company’s needs while still meeting the other party’s interests.
- Bring your research. Support your claims with appropriate data or testimonials from similar clients.
- Get emotions out of the way. Business negotiations are just that — business. Avoid complicating the process with personal feelings. Eliminate “I think” or “I feel” statements and focus on facts.
- Take a positive approach. Express appreciation for the other party and what they bring to the table. Find points you can agree on. Set the tone for a contract negotiation process that will best serve both parties’ interests.
- Go slowly. Take your time before, during and after the negotiations. Plan to complete research and required documents well in advance of any meetings or negotiations. Avoid making hasty decisions during the process. After negotiations wrap up, follow through on any questions or deliverables.
Simplified Contract Negotiation
In finalizing a contract, contract management software can help streamline the redlining process. All parties can access a secure document and view changes in real-time. Learn more about Ironclad’s contract management platform that simplifies contract negotiations.
More about Ironclad
Ironclad is the leading digital contracting platform for legal teams. By streamlining contract workflows, from creation and approvals to compliance and insights, Ironclad frees legal to be the strategic advisors they’re meant to be. Ironclad is used by modern General Counsels and their teams at companies like Dropbox, AppDynamics and Fitbit to unlock the power of their contracts data. Ironclad was named one of the 20 Rising Stars as part of the Forbes 2019 Cloud 100 list, the definitive list of the top 100 private cloud companies in the world. The company is backed by investors like Accel, Sequoia, Y Combinator and Emergence Capital. To learn more, visit our homepage.
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