Contract Negotiation Tips Every Small Business Owner Should Use
From my personal experience, most small business owners dread the process of contract negotiation. To most people, it would be preferable to shake hands on an agreement and begin working on obligations.
What Is In A Contract?By clear definition, a contract is an agreement between parties that is intended to be enforceable by law. What this means is that a contract can either be oral or written. However, when it comes to the business climate, it is better to have a written contract that clearly spells out the duties and obligations of parties to the contract.
What Types Of Contracts Do You Have To Deal With?As a business owner, you are sure going to have to handle a lot of contracts. Some of them include leases, sales contracts, service contracts, employment agreements, engagement agreements, liability releases, intern agreements, and so on.
In a lot of instances, no two contracts are the same, and it could be a bit overwhelming to negotiate the contracts and handle the related paperwork.
Preparing for contract negotiationI advise that when you want to prepare for a contract negotiation, it is best to have a clear understanding of your business needs. When you understand your business needs, you would know the things to prioritize in the course of contract negotiation.
You should categorize terms into 'musts' 'like to have' and 'don't need'. This way, you would know issues you can compromise on, and issues where you would not shift ground.
Tips for a successful contract negotiationAfter preparing for the contract negotiation, here are some tips you can follow during the negotiation to make it a success.
- Understand your needs and prioritize them.
- Get professional help. Yes, it might be expensive to retain an attorney, but it is worth the cost if you want to have legal and business protection. You should also consult with other leaders in your organization, to prevent you agreeing to obligations your organization cannot
- Understand the other party's needs: It helps to understand why the other party is asking for a certain provision. It might not be for the reason you think.
- Read, and reread all documents pertaining to the transaction, including exhibits and attachments.
- Communicate clearly, professionally and concisely.
- Maintain a positive attitude.
- Remember that most differences can be positively resolved.
- Don't rush into anything that doesn't seem right.
- Make sure the appropriate party signs all agreements.
How an attorney can helpAs a business owner, an attorney can help you in many ways during contract negotiation. Attorneys can help you draft documents, answer questions, revise documents, and a host of other things.