5 Tips for Successful Commercial Contract Negotiations
After months of to-ing and fro-ing, discussion, speculation and uncertainty, the UK has been granted a further extension to Brexit negotiations and now has until the 31st October to secure a deal.
Regardless of your political opinions, it would be difficult to argue that the UK’s negotiations around Brexit have been well-executed.
Negotiating deals with various parties – suppliers, customers, stakeholders and employees can play a significant role in a business’ ability to prosper. In this blog, we look at 5 ways a business can put its best foot forward when negotiating.
Aim for a swift conclusion
As demonstrated by the Brexit negations, sometimes, the longer negotiations are allowed to protract, the more opportunity there is for objections to come to the forefront and for the possibility of negotiations breaking down. This can particularly be the case when negotiating an issue that is already the cause of contention, such as a contract dispute. On the other hand, rushing into an agreement could be equally – or more – damaging. Aiming for a swift but considered agreement should be the preferred route forward.
Seek professional advice
Negotiating an agreement can be a difficult and sometimes complex process without complicating things further with poorly drafted contracts or misleading clauses. Many a business deal has been lost for less, so it is always worth investing in legal advice you can trust. Instructing a solicitor with demonstrable experience in drafting commercial contracts will also help to ensure that all legal considerations have been made and accounted for in the contract, protecting you against potential disputes in the future.
Although the goal posts might change several times during the course of your negotiations, it is worth considering exactly what you are willing – and not willing – to accept prior to commencing formal discussions. Although you won’t want to put all your cards on the table at the outset, if there are elements you really will not compromise on, you could save yourself a lot of time and effort by communicating these with the other party at an early stage. Being clear about these with your solicitor will allow them to include these elements in the head of terms – a precursor to the formal agreement which sets out the core terms a party sees as forming the main part of the contract.
Beware of confidentiality
Depending on the nature of the contract, sensitive business information can play a part in discussions. If it is necessary to reveal sensitive information about your business, make sure a confidentiality agreement is signed before doing so. This is usually in the form of a non-disclosure agreement (NDA). Should you be asked to sign such an agreement by another party during negotiations, you should seek clarity on exactly what content is confidential.
Be mindful of ‘informal’ negotiation
As per our recent blog (Can emails be legally binding?), do be mindful of any discussions that may take place over email or any other form of communication. Any such discussions should be explicitly marked as being ‘without prejudice’ so as to avoid becoming bound to a contract or an amendment to an existing contract without realising.
O’Donnell Solicitors has a great deal of experience in representing clients in drafting and negotiating commercial contracts. We pride ourselves on providing commercially astute, straight-talking advice.
To access our Commercial Contract services please contact James O’Donnell or Suzzanne Gardener on 01457 761 320 or email James O’Donnell at firstname.lastname@example.org or Suzzanne Gardener at email@example.com.