20 top tips for successful contract negotiations
The first 10 in our 20 top tips for successful contract negotiation!
Top Tip Number 1
First develop your negotiating strategy
How?…. follow these top 20 tips of course!
Top Tip Number 2
Create a situation where you partner with the other side (now we have sides!) and create an atmosphere of openness and honesty so that both of you will meet your corporate goals and objectives. Contract negotiations are not a zero sum game, just ask Donald Tusk. (who? I hear you say- well exactly..), rather its a mutual attempt to be ‘satisfied’ with the outcome. Always try to create a situation that would encourage the supplier to be honest and tell you if they think they would to struggle to deliver.
Top Tip Number 3
Decide where the negotiations are to be carried out (face to face will always be a priority) and use your own premises if you can.
Top Tip Number 4
Record and agree what has been agreed
If the negotiations are complex always make sure you have someone who will record ‘without prejudice’ discussions, and that both parties agree how the record will be managed. In our experience this is a place where a lot of time will be saved. It may seem obvious but a record of what has been agreed during a negotiation, outside of a written contract, …and what can then be written into the contract is essential.
Top Tip Number 5
Decide who to include (..and exclude!) in the negotiation process
Pick only people with experience and capability to join your team. If the negotiations are technically complex you may want to include technical expertise or at least have it to hand.
Top Tip Number 6
Consider legal support
Do you require legal support? If not consider whether your confident about creating any legal risk. If you are unsure always seek advice.
Top Tip Number 7
Know the suppliers team
Always know who you are negotiating with, who they are, and what they do. You will want to satisfy yourself that you are actually negotiating with people who actually have the authority to represent the other side!
Top Tip Number 8
Get to know the ITT
- What were goods or services are to be provided?
- What was the price for the work to be delivered and the approach to payment and changes?
- What were the completion stage dates, or renewal dates?
- Were any terms and conditions explained?
If these are not clearly defined or even if they are you will need to decide how to work these items into your contract negotiation strategy before you start.
Top Tip Number 9
Know your own priorities and any alternatives
Ensure your know what your own priorities and alternatives will be during he negotiation, and also what your least important items are. You may want to refer to these if you have to give up something to get the priority items you want.
Top Tip Number 10
Just like Kenny Rogers (I know old school!)- know when to walk away
You need to know what your limits are; is there a cost that your company cannot exceed? What top items must be delivered within the price and are non negotiable? It may be best to list these along with the rationale so they are not forgotten. If the supplier doesn’t agree to deliver these, then you need to know whether it would be better to walk away and start again with another supplier.