How To Negotiate A Contract – By conducting your contract negotiations on a central platform, in a browser, communication and collaboration improves, helping legal departments to save time and identify ways to increase the value of the contract in question.
Contract negotiations are one of the most important elements of the entire contract management process. You may have some lingering questions about how to successfully negotiate a contract, when negotiations take place, and what skills and strategies you should learn for effective negotiation. We touch on all these topics below. Contract negotiation is central to reaching agreements, and to identifying some other key items relating to a particular contract. For example, during contract negotiation, you can assess where potential risks may arise, add value to the business partnership, and identify how you can improve the current agreement to make it more favorable to both parties. We will discuss the need to centralize the collaboration involved during your contract negotiations in a secure all-in-one contract management system in the cloud. Such solutions give negotiators the ability to reach higher business goals due to a simplified and technologically enhanced contract negotiation process. By conducting your contract negotiations on a central platform, in a browser, communication and collaboration improves, helping legal departments to save time and to identify ways to increase the value of the contract in question. Now let’s go ahead and dive into contract negotiations and learn some key negotiating skills and tips that will help speed up your negotiations and maximize business success. Contents – Definition of Contract Negotiations When Do Contract Negotiations Begin? How to Negotiate Contracts Key Skills Contract Negotiation Strategies and Tips for Successful Contract Negotiation Conclusion Negotiating Contracts Defined Contract negotiation is the procedure used by two or more parties to develop terms, obligations and rights to be included in a legally binding agreement. During contract negotiation, each party must be fully satisfied with every item included in the agreement and be ready for the signature stage in order for the contract to move forward. When Does Contract Negotiation Come into Play? Contract writers must confirm that internal contract stakeholders and the legal department approve the draft contract terminology and language before submitting it to a counterparty for review. Automated, pre-approved contract drafts help standardize contract language with appropriate lawyers who can help mitigate risks and errors. When writing and reviewing contracts, parties will work to meet their individual objectives in terms of issues that may affect the contract, such as potential risks and outcomes. If a party is not satisfied with contractual terms or finds that the language contained is not compatible with its goals, the contract is sent for negotiation. Other items including old clauses and conflicting language can also trigger contract negotiations. A company’s legal department usually plays a central role in negotiating and reviewing contracts. However, other relevant departments will often be involved in contract negotiations, and these departments include HR, procurement, operations, finance, and sales just to name a few. These departments can complete contract negotiations on their own and can contribute their insight when their assistance is requested for contract review. The law plays a huge role in overseeing the language and terms of a contract. If an employee needs help understanding heavy legalese, deciding whether certain contract wording is favorable or not, or is confused about the risks associated with a particular set of contract terms, the first step is often to consult a legal department the company for their expertise and assistance. . What are contract negotiations like without a central online contract platform? Well, you’ll have to resort to a process that requires longer turnaround times that can hinder the overall productivity of your contract management. How to Negotiate Contracts With a centralized and comprehensive contract management system along with automation capabilities, you can collaborate with counterparties effortlessly during contract negotiations in one digital location. Here’s what contract management software has to offer to simplify your contract negotiation phase: Reline features make it easy for parties to make changes to documents Comments can be used to communicate which parts of the contract are in conflicts and to question Version tracking makes it easy to view a time-stamped revision history and identify who has made changes and where Audit trails are securely documented, enabling stakeholders to gain insight into all -discussion so they can improve on them in the future With a collaborative and accountable contract negotiation stage, counterparties are able to gain a better understanding of contract expectations and where the other party stands. In this way, negotiators can assess their needs and make informed decisions during the negotiation. When all these aspects are considered, you can have successful negotiations that lead to mutually beneficial terms and goals as well as an increase in the value of the contract. Something that needs to be considered for contract negotiations is data capture. By collecting key data at the start of the contract lifecycle during the contract acceptance and application phase as well as during the contract authorization phase, you will increase the efficiency of your negotiations by eliminating the need for manual data collection later on. You can gain great insight by analyzing contract data that will help your team effectively complete negotiations that lead to better results. Your legal department can let the data drive their decisions, and they can have increasingly strategic contract negotiations by using pre-approved contract templates and standard company negotiation procedures. Key Contract Negotiation Skills You can develop meaningful business relationships by using powerful contract negotiation skills. Let’s dive into some important skills to keep in mind when conducting a negotiation: Proper legal knowledge Automated contract negotiation software and pre-approved contract templates are most likely supported by a team of legal professionals and u legal expertise. All of these items are available for business teams to leverage to increase their level of legal knowledge, so use them to your advantage. Risk awareness Closing deals correctly while maintaining awareness of areas where risk is key. An online contract management system enables stakeholders to easily collaborate and adhere to industry regulations and policies, as well as maintaining the security of private company data. Effective communication Your agreements need to be drafted with simple, concise language. Each party should assess and understand the potential risks of a particular agreement and then discuss them clearly during the negotiation. By communicating clearly, you make it easier for your counterparty to understand your concern rather than having to decipher a nebulous concept – meaning more time is spent understanding rather than coming to an agreement. A business-driven and goal-oriented approach You want the end result of a contract negotiation to be in line with the goals set by your company. No matter what department you work in, it’s key to understand what contract provisions are up for negotiation and how to yield in a way that can still lead to positive business outcomes. By having an appropriate level of transparency during the negotiation, you can help your counterparty better understand your position which could help solve problems and add value to a larger goal at hand. Professionalism Professionalism is always the best way to go about it – there’s no need to engage in an adversarial way during your negotiation phase. During contract negotiations, you want to collaborate effectively and reach mutually beneficial solutions with your counterparty in a way that adds value to both sides of the agreement. Your counterparty can act as a strategic and helpful business partner that gives your company competitive advantages in the form of their services as long as you create an environment that allows it! Strategies and Tips for Successful Contract Negotiation Some useful strategies to increase contract negotiation success include the following: Consider your counterparty’s point of view and what they are trying to gain from your business relationship Ask questions based on “ why” to increase the depth of communication Assess possible solutions and options for resolving disagreements Review contracts only when the review can help achieve a well-defined goal When you are confused by the counterparty’s communication, talk and ask for clarification Prioritize heavily weighted contract terms rather than wasting time negotiating lower value items With Doc 365, negotiating contracts is easier than ever before. Maintain control of your contract negotiations and achieve the desired results by using a platform that centralizes all counterparty communication and collaboration with Microsoft Office 365 and SharePoint. Now, you can have a simple, yet optimized contract negotiation experience that drives results. If you’re in the market for software that improves the effectiveness and security of your discussions, then Doc 365 is for you. Conclusion Provide your legal team with intelligent and easy-to-use contract management software for seamless contract negotiations. We hope you got value from our discussion on contract negotiations and if you have any further questions, please feel free to contact us here at Doc 365. Doc offers an affordable and easy-to-use approach to contract management that leverages your existing Microsoft 365 infrastructure.
How To Negotiate A Contract