When you are starting a new business, having strong agreements is important. Well-drafted agreements will protect you and your business in the event of a dispute or legal action. However, most contracts involve complex or nuanced issues that non-lawyers would not be aware of and it is important for non-lawyer business owners not to undertake drafting the company’s agreements by themselves.
An experienced business attorney knows how to negotiate and draft business contracts and can help ensure that your company’s interests are represented effectively. In this article, we will discuss the key steps needed to negotiate your business’ contracts.
Setting Goals and Expectations
The first step in any negotiation is to understand what you want to achieve. What are your goals? What are your objectives? What are your non-negotiable terms? Crafting an offer or developing a negotiating strategy can only start after you have effectively communicated these important terms to your attorney and there is a clear understanding of your goals.
Knowing exactly what you should ask for can be difficult, and this often leads business owners to compromise more than they should in an important negotiation. You should never make an offer that you’re not prepared to follow through on. If the other party accepts your offer, there is a binding agreement and you will be expected to fulfil your contractual obligations.
Key Steps to Successful Contract Negotiation
Once you set your goals, it is time to begin negotiation with the other party. Look for your business attorney to address these key steps in a successful negotiation:
- Your company’s goals should be the focus of the negotiation;
- Evaluate the other party’s negotiating positions to determine their most likely goals and desired outcome;
- Anticipate the other party’s responses to negotiation points, and be prepared with counter-responses;
- Look for possible points on which to compromise that keep the negotiation heading toward agreement;
- Recognize when the negotiations are in your company’s favor, and capitalize on that momentum to achieve the best possible terms.
If an agreement cannot be reached, then you may need to walk away from the negotiation. Sometimes, the best course of action is to let the other party know that you are not willing to agree to a bad deal just for the sake of reaching an agreement. Negotiations can usually resume in most instances with a final push to achieve a deal.
What to Avoid During Negotiation
There are a few things that should be avoided during the negotiation process, as they can jeopardize the chances of reaching an agreement. These include:
- Damaging your relationships in the process – do not destroy or weaken advantageous business relationships that will benefit the company well after the potential agreement is consummated or not;
- Rushing through the process or compromising main goals to save time or to just reach a deal;
- Showing up for negotiations unprepared;
- Shutting off or delaying communication, with either your lawyer or the other party.
Knowing the mistakes to avoid and the steps that will lead to success will greatly increase the odds of a successful negotiation and business deal.
How Can The Frazer Firm Help?
If you’re looking to negotiate a business contract, you need experienced business counsel on your side. Hiring an experienced business attorney can help you avoid common mistakes and give you the best chance at negotiating a successful business contract.
Experienced business litigators at The Frazer Firm know what contractual trap doors can lead to costly, time-consuming litigation and can help you avoid them. To learn more about how the business attorneys at The Frazer Firm can help achieve your business goals, call our office today for an initial consultation.
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