30 of the Best Questions to Ask in Any Negotiation
Introduction
Asking the right questions is one of the most important parts of any successful negotiation – next to preparation. Great questions drive the conversation, uncover needs and reveal hidden interests. The quality of your questions determines the quality of the information you gather, the solutions you co-create, and ultimately, the agreements you reach. This is why we wrote this article ’40 of the Best Questions to Ask in Any Negotiation’.
Think about it, when you are communicating, there is so much hidden value that you are able to unlock with your questions.
In this article we dive into the most effective questions to ask in any negotiation and frankly in any interaction. I like to refer to these questions as High Quality Questions. We focus on the Rules for Asking Great Questions and list “How” “What” and “Why” questions, as well as essential phrases that every negotiator should have in their toolkit. This will guide you through discussions, resolve disagreements, and reach meaningful outcomes.
What We Will Cover
In this article, we will explore the importance of asking high-quality questions in negotiations. You’ll learn:
- Four key principles for framing your questions effectively.
- The power of “How,” “What,” and “Why” questions to uncover needs and hidden interests.
- Practical phrases and active listening strategies that will transform your negotiation approach.
- A set of 30 questions to guide your discussions and reach better outcomes.
The Rules for Asking Great Questions
Before diving into the specific types of questions you should use in negotiations, it’s important to pause and understand why the quality matters so much. Asking great questions is not just about curiosity – it’s about strategy. High-quality questions are tools that unlock insights, foster collaboration, and pave the way for creative solutions.
Many negotiations fail not because of a lack of preparation but because one side fails to ask the right questions or listens poorly to the answers. By mastering the way you ask questions, you show confidence, demonstrate that you value the other person’s perspective, and gain access to critical information that can tip the scales in your favor.
However, asking effective questions requires discipline. It’s not just about what you ask but how you ask. To guide you, we focus on the four key principles to keep in mind.
Ask Open Questions – Avoid ‘Yes’ or ‘No’ Questions
Open-ended questions are one of the most powerful tools in a negotiator’s toolkit. Questions that can be answered with a simple “yes” or “no” tend to shut down conversations rather than open them up. For example:
- Instead of asking, “Do you agree with this price?” or “Did you have a nice holiday” etc
- Try, “What are your thoughts on this pricing?” or “Tell Me About Your Holiday“.
The second approach encourages the other party to elaborate, giving you valuable insights into their reasoning, concerns, or hesitations. Open-ended questions invite dialogue, uncover motivations, and often reveal opportunities to find common ground.
When you ask open-ended questions, you position yourself as someone genuinely interested in understanding the other side, which builds trust – a crucial element of any negotiation.
See this great article “Asking Open-Ended Questions Increases Personal Gains in Negotiations” from Matteo Di Stasi, Alison Wood Brooks, and Jordi Quoidbach on this subject.
W.A.I.(S.)T. – Why Am I (Still) Talking?
This principle is simple yet often overlooked: ask your question, then stop talking. Silence may feel uncomfortable, but it’s one of the most effective tools a negotiator can use. Many people sabotage their own questions by filling the silence with explanations or, worse, answering the question themselves.
For example:
- Asking, “How does this align with your goals?” is a great. However, if you then immediately add for example, “I mean, I assume it does not fully align, but we can discuss…?” undermines the power of the question.
- During contract negotiations you might ask: “Does this new wording in Art X work for you?” and then immediately filling the silence with assumptions like, “I assume it’s probably not fully aligned with your proposed wording, but I am sure we can work something out….” would again not be advised. Ask your question and wait for your answer. Wait and allow the other side to respond. Their answer might surprise you, such as: “Actually, the wording is fine, except for this one word. Would this alternative work for you?”
By think about the concept “W.A.I.S.T. – Why Am I Still Talking?” – you give the other party space to think, process, and provide a meaningful answer. The silence you leave can be a powerful motivator for the other person to fill it with their thoughts, which often reveals more than you might expect. Insight: by staying quiet, you avoid creating problems that don’t exist and let the real issue surface.
Land the Plane
The concept of “W.A.I.S.T.” and “Land the Plane” comes from Alexandra Carter’s book, “Ask For More – 10 Questions to Ask to Get What You Want. It’s about asking a clear, concise question and then stopping—giving the other party space to respond. Many negotiators undermine their own questions by “circling the runway,” over-explaining, or talking too much.
For example:
- Instead of asking, “How does this price fit within your budget?” and then nervously adding, “I mean, if it doesn’t work, we can look at discounts, or we can split it into payments…”
- Simply ask: “How does this price fit within your budget?”
Why does this work?
When you “land the plane,” you:
- Avoid diluting your message. Adding extra words or unnecessary suggestions often weakens the strength of your question.
- Give the other party room to think and answer. Negotiations require processing time. Silence often encourages deeper responses.
- Project confidence. A clear question followed by quiet shows that you value their input and are comfortable waiting.
Active Listening
Active listening is a very powerful tool that I learned from the Harvard Program on Negotiation, but a lot has been written about the subject. s not just about hearing words – it’s about understanding, processing, and responding thoughtfully. Effective negotiators don’t just wait for their turn to speak; they listen carefully and build their follow-up questions based on what was said.
What Is Active Listening?
As mentioned in a recent Harvard Business Review article, active listening is when you not only hear what someone is saying, but also attune to their thoughts and feelings. It turns a conversation into an active, non-competitive, two-way interaction. Robin Abrahams and Boris Groysberg from Harvard Business School describe active listening as having three aspects: cognitive, emotional, and behavioral. Here’s how they define each aspect in their article, “How to Become a Better Listener”:
- Cognitive: Paying attention to all the information, both explicit and implicit, that you are receiving from the other person, comprehending, and integrating that information
- Emotional: Staying calm and compassionate during the conversation, including managing any emotional reactions (annoyance, boredom) you might experience
- Behavioral: Conveying interest and comprehension verbally and nonverbally
For example
- If the other party says, “We’re concerned about the delivery timeline,” an active listener might follow up with, “What part of the timeline feels unrealistic to you?”
- When your counterpart mentions: “We are particularly concerned about your liability clauses so we will need to go with our standards”, instead of going into a discussion why you should your standards (or not), ask what part of the clause they are concerned about and what the reason is of the concern.
This approach achieves two things:
- It shows the other party that you are engaged and care about their perspective.
- It gives you the chance to gather more information and address their concerns directly.
Active listening also helps avoid assumptions, which are a common pitfall in negotiations. When you listen deeply and ask relevant follow-up questions, you reduce the risk of misunderstanding and strengthen the quality of the dialogue.
Why These Rules Matter
The reason we reiterate these rules is that asking great questions is both an art and a skill. It requires intentionality, focus, and practice. When you master the art of asking clear, open-ended questions and combine it with active listening, you gain a huge advantage in any negotiation.
Think of it this way: questions are like keys. Some questions unlock doors to hidden opportunities, while others keep those doors firmly shut. By avoiding closed questions, staying silent after you ask, being concise, and actively listening, you ensure that you’re asking the right questions in the right way.
These rules serve as the foundation for all the “How,” “What,” and “Why” questions we’ll explore in this article. Use them consistently, and you’ll find that your conversations become more insightful, your relationships stronger, and your outcomes more favorable.
In short: ask well, listen better, and negotiate smarter.
30 Questions to Improve Your Negotiations
1. “HOW” Questions
“How” questions are powerful because they focus on process, possibility, and solutions. They encourage the other party to think constructively and collaboratively, which can shift negotiations from conflict to cooperation.
As Chris Voss explains in Never Split the Difference, “How” questions work particularly well because they force the other party to engage with your perspective without feeling attacked. For example, asking “How am I supposed to do that?” puts the burden of providing solutions back onto the other party.
Examples of “HOW” Questions
- How am I supposed to [do that/pay this]?
- How does this violate our agreement?
- How do we know?
- How can I help make this better for us?
- How on board are the people who are not here today?
- How would you feel if…?
Further Reading:
- How to Use “How” Questions in Negotiations – YouTube explanation from Chris Voss – The Black Swan Group (Book: Never Split the Difference).
- Getting to Yes: The Art of Collaborative Negotiation – Harvard PON.
2. “WHAT” Questions
“What” questions are neutral, open-ended, and non-confrontational. They work because they invite the other party to explain themselves without feeling defensive. According to negotiation theory from Getting to Yes, “What” questions help you uncover key interests and concerns.
For example:
- “What challenges do you see with this proposal?” encourages the other party to express their concerns openly, allowing you to address them proactively.
- “What is your biggest concern?” cuts through surface-level objections and gets to the root of the problem.
“What” questions also create opportunities for exploration and creativity, two elements that experts agree are critical in creating value during negotiations.
More Examples of “WHAT” Questions
- What else would you like us to know?
- What is the reason…?
- What if we tried…?
- What are your views on…?
- What challenges do you see with…?
- What is your biggest concern?
- What brought us into this situation?
Further Reading:
- Getting to Yes: The Power of Questions – Harvard Program on Negotiation.
- How to Ask Powerful Questions in Negotiation – Harvard Business Review.
3. “WHY” Questions
“Why” questions are excellent for uncovering motivations, values, and hidden interests, but they must be used carefully. While they can dig deeper into someone’s reasoning, poorly phrased “Why” questions may come across as accusatory or confrontational.
The key to using “Why” questions effectively, as emphasized in negotiation literature, is tone and intent. According to Fisher and Ury in Getting to Yes, asking “Why is this important to you?” encourages the other party to share their underlying interests without feeling attacked.
Additionally, “Why” questions help you test assumptions and challenge objections diplomatically. For example, “Why would this solution not work for you?” invites constructive feedback instead of resistance.
As mentioned by Chris Voss, you should avoid asking too many “Why” questions and use other high quality questions as ‘Why’ questions could have a negative connotation.
Examples of “WHY” Questions
- Why is this so important for you?
- Why is this unacceptable to you?
- Why should we consider…?
- Why should we delay an answer on this?
- Why would this solution not work for you?
- Why is this part of the article crucial for you?
Further Reading:
- See this video “The Secret Way To Use “Why” & “No” in Your Next Negotiation | Chris Voss”.
- The Psychology of ‘Why’ Questions in Negotiation – Psychology Today.
4. Great Phrases You Can Use
Also part of asking high quality questions is using effective phrases that create an atmosphere of collaboration and understanding. These phrases are excellent for encouraging dialogue, clarifying positions, and keeping the negotiation constructive.
Examples of Great Phrases
- Is there anything I am missing…?
- Have you given up on this…?
- Is it okay if…?
- I am curious…
- It sounds like…
- Tell me about…
- OK, help me understand…
These phrases demonstrate humility, curiosity, and a desire to understand, which are key elements of building trust and achieving better results.
Conclusion
Asking high-quality questions is a game-changer in negotiations. By focusing on “How,” “What,” and “Why” questions, and complementing them with great phrases, you can steer conversations toward productive outcomes. Whether you’re addressing objections, seeking clarification, or exploring solutions, it allows you to gain insights, uncover motivations, and move closer to a successful agreement.
Also see the importance of great questions in this article ‘The Surprising Power of Questions’..
About AMST Legal
At AMST Legal, we provide negotiation and contract advice to help businesses achieve better results. Contact us at lowa@amstlegal.com or book a meeting here for help with a negotiation or for (team or individual) training to become a better negotiator.
DeepSeek – Is your Data Safe? Everything You Need to Know
In my previous article we examined how ChatGPT, Perplexity and Claude uses your data (AI data use). We also mentioned the potential risks of sharing confidential or proprietary information – and how to avoid these risks. It is clear that not all tools offer the same safeguards regarding data privacy, security, and legal protections. We will therefore continue comparing AI models. This week a focus on the AI model DeepSeek. See below our Article ‘DeepSeek – Is your Data Safe? Everything You Need to Know’.
DeepSeek was unknown to most people outside of the People’s Republic of China (“PRC“) until this week. In the course of one week it has however gained immensely in popularity. It is yet another AI-driven platform, but there are important differences with the other well-known AI models. DeepSeek is currently challenging AI models like ChatGPT and Gemini in capabilities unexpected until yesterday. In this article, we will explore DeepSeek’s Privacy Policy & Terms of Use. We will also handle issues such as personal data storage, AI model training and jurisdiction. If you’re wondering whether you can safely use DeepSeek for personal or professional tasks, read on to discover the key facts, risks and best practices.
This article has been written at the start of the broad use of DeepSeek. It is therefore work in progress, based on first information gathered.
What We’ll Cover
- DeepSeek Overview: Short explanation of the platform and why are people interested in it.
- Privacy Policy Highlights: Including details on storing personal data, especially full names and addresses.
- Location of Data: How and why user data may end up on servers in the People’s Republic of China.
- Terms of Use: Whether DeepSeek incorporates your content into training its AI models—and what that means for you.
- Data Privacy in China: The local regulatory environment and how it differs from GDPR or CCPA.
- Confidentiality: Potential risks if you’re handling sensitive or proprietary information.
- Final Advice: How to proceed if you’re considering using DeepSeek, plus some general cautionary steps.
1. DeepSeek Explained
New AI Model
DeepSeek is a cutting-edge large language model (LLM) similar to ChatGPT and Gemini. It is developed by a Chinese AI company with the full name ‘Hangzhou DeepSeek Artificial Intelligence Co., Ltd., and Beijing DeepSeek Artificial Intelligence Co., Ltd.’. It is designed to tackle a range of complex tasks with impressive efficiency according the latest tests. According to Google Gemini its powerful AI shines in several key areas:
- Math Whiz: DeepSeek excels at mathematical reasoning and problem-solving, often outperforming other models.
- Logic Master: DeepSeek handles complex, multi-step logical reasoning with ease.
- Code Conjurer: DeepSeek understands and generates code in various programming languages, making it a valuable tool for developers.
- Conversation Starter: DeepSeek is a natural language expert, capable of engaging in coherent and contextually relevant conversations.
- Global Communicator: DeepSeek is trained on diverse linguistic data, offering some level of multilingual support.
Consequences Stock Market
On 26 January 2025 there was even a big shake up in the stock market due to Deep Seek. US stocks plummeted as traders fled the tech sector and erased more than $1 trillion in market cap amid panic over the introduction of DeepSeek. The S&P 500 nearly 1.5% lower, while the tech-heavy Nasdaq Composite had shed more 3% by the end of the day. DeepSeek roiled stock futures after the AI model was said to outperform OpenAI’s ChatGPT in several tests. The losses gathered momentum after DeepSeek became the most downloaded app on Apple’s App Store in the US on 26 January.
Source: Business insider.
A Growing Global Market
As AI popularity expands worldwide, companies outside the U.S. and Europe (especially China) are developing their own solutions. DeepSeek is notable because it may offer high-speed performance and robust Chinese language capabilities. This makes it attractive to users with specialized language needs. However, these benefits come with a different legal framework, which can pose challenges for those used to Western data protection standards.
It has also been reported that DeepSeek is able to offer similar services and results as ChatGPT, Gemini, etc. for a fraction of the cost. This has greatly fueled popularity of the new AI model.
2. DeepSeek’s Privacy Policy: Personal Data Collection
Amongst others, according to a review of DeepSeek’s publicly accessible Privacy Policy, the platform collects a wide range of personal information. Qoute: “When you create an account, input content, contact us directly, or otherwise use the Services, you may provide some or all of the following information:
- Information When You Contact Us. When you contact us, we collect the information you send us, such as proof of identity or age, feedback or inquiries about your use of the Service or information about possible violations of our Terms of Service (our “Terms”) or other policies.
- Profile information. We collect information that you provide when you set up an account, such as your date of birth (where applicable), username, email address and/or telephone number, and password.
- User Input. When you use our Services, we may collect your text or audio input, prompt, uploaded files, feedback, chat history, or other content that you provide to our model and Services.
Additionally DeepSeek stores (i) Automatically Collected Information like technical information, usage information, cookies, payment information and (ii) information from other sources like login, signup or linked information.
Where Is Information Stored
DeepSeek explicitly states:
“The personal information we collect from you may be stored on a server located outside of the country where you live. We store the information we collect in secure servers located in the People’s Republic of China.
Where we transfer any personal information out of the country where you live, including for one or more of the purposes as set out in this Policy, we will do so in accordance with the requirements of applicable data protection laws.”
For many users – especially those in countries with stringent privacy regulations – this is significant. Your legal recourse to access, delete or restrict your data might be limited once it’s hosted on servers in the PRC.
How Is This Data Stored and Processed?
While the Privacy Policy mentions “secure servers,” it is not clear how they deal with specific practices such as:
- Encryption: Are your data and prompts encrypted at rest or in transit?
- Third-Party Sharing: How widely is your data shared for analytics or collaboration?
- Data Deletion: What happens if you decide to close your account or remove certain information?
- Data Security: How are the servers protected against e.g. cyberattacks.
If you’re accustomed to GDPR (EU Data Privacy Regulation) or CCPA (California Data Privacy Regulation), you may be disappointed by the lack of clearly defined user rights (like the right to be forgotten or the right to data portability). It remains to be seen how these matters are covered by DeepSeek. Especially from a regulatory point of view – data privacy, data security and now also AI (see the EU AI Act).
There are many more aspects that are very interesting in the DeepSeek Privacy Policy, but for the purposes of this article this would be too much information to touch on all aspects.
3. DeepSeek’s Terms of Use: Model Training & Governing Law
DeepSeek’s Terms of Use do mention that the AI model will only use your Inputs in specific cases. It is however not exactly clear how broad this should be read. See part below in blue. The terms also offer a way for its customers to inform DeepSeek that they refuse DeepSeek to allow to use their Input data.
Potential Risks for Confidential Information
When adding client documents, proprietary research, or any private data as always be mindful. As far as we are aware at this moment:
- No Guarantee of Confidentiality: There is no explicit promise to keep sensitive data confidential.
- Future AI Outputs: The model might inadvertently reveal or be influenced by your confidential info.
- Irreversible Submission: As DeepSeek’s Terms of Use do not mention how long DeepSeek will store your data, this will allow indefinite use of your data.
- Unclear use of Input: it is not exactly clear how and in which cases your Inputs will be used to create Outputs or to train the model. It is likely and we should assume that DeepSeek uses your Input to train their AI model.
Governing Law and Jurisdiction
Next, let’s review the terms regarding governing law and jurisdiction, meaning the laws that govern the use of DeepSeek and where you will need to go to court in case of litigation with DeepSeek. DeepSeek clarifies this as follows in the Terms of Use:
9. Governing Law and Jurisdiction
9.1 The establishment, execution, interpretation, and resolution of disputes under these Terms shall be governed by the laws of the People’s Republic of China in the mainland.
9.2 If negotiation fails in resolving disputes, either Party may file a lawsuit with a court having jurisdiction over the location of Hangzhou DeepSeek Artificial Intelligence Co., Ltd.
This means:
- The laws of the People’s Republic of China govern all legal disputes.
- Chinese courts in Hangzhou, PRC, will handle any lawsuits.
- Even though it is stated in the terms that DeepSeek will comply with applicable laws, research still needs to be done whether they will comply with GDPR, CCPA or other foreign regulations.
4. Data Privacy in China
In the EU and US there have been large initiatives since 2018 with respect to extensive legislation relating to the protection of data privacy and data security. In the coming years there will even be more regulations in connection hereto. See our article ‘Six New EU Regulations – like the AI Act – Explained‘.
Regulatory Differences
While China has its Personal Information Protection Law (PIPL), it doesn’t mirror the scope or depth of frameworks like GDPR or CCPA or the other regulations mentioned above – as far as we are aware but we are not lawyers or legal advisors versed in PRC laws.
Implications for International Users
If you reside outside China:
- Limited Recourse: You might find it harder to challenge data privacy & security issues in a Chinese court.
- Compliance Gaps: The data privacy and data security protections you are used to under EU or U.S. law may not apply here.
- Cross-Border Transfers: Even if the Privacy Policy mentions meeting local regulations, these could be PRC regulations that differ significantly from your home country’s standards.
5. Which Data Not to Share in AI Models
As we stated in our article with respect ChatGPT, Gemini and Perplexity, apply common sense and caution when adding data to any online AI model. This could be different for local models – depending on the security measures taken by the AI model.
Avoid sharing for example:
- Confidential details (client, business or family member names, private letters, contracts & strategies).
- Personally identifiable information (PII) (addresses, phone numbers, medical records).
- Proprietary or business-critical data (unreleased products, prices, financials).
- Sensitive materials (health info, internal memos, or business & personal).
- Data protected by Applicable Law (copyright, illegal data, government data).
If you must work with potentially sensitive text, we recommend considering the following:
- anonymizing the data first,
- using an enterprise-level AI solution where the Terms of Use prohibit using your content for model training. This doe not seem to be possible for DeepSeek, or
- an ‘on-premise’ AI model that anonymizes data.
6. Bringing It All Together
DeepSeek represents an interesting expansion of the AI landscape, especially for those who require strong Chinese language capabilities or want to explore AI solutions outside typical Western providers. However, its legal environment, data storage location, and governing jurisdiction all point to a platform that may not uphold the same privacy or confidentiality standards you’d expect under GDPR or CCPA.
This doesn’t mean DeepSeek is without merit. You should approach it with open eyes and informed caution. If you have critical confidentiality needs or work in a heavily regulated sector, it is wise to look elsewhere or secure a specialized enterprise agreement that explicitly addresses data protection concerns. For casual or non-sensitive uses, DeepSeek could be a helpful AI resource. As always, be mindful of what you submit and how it could be stored and potentially accessed under Chinese law.
7. Final Thoughts
AI is transforming the way we work – but it’s also transforming how data can move beyond our control. It is advised to think twice before you add content to any AI (LLM) Tool and actively keep track of how your content is used by any AI tool.
As always, we need to stay informed, be cautious and be proactive. That way, you can use the power of AI without compromising your most sensitive information. Keep an eye out for our upcoming in-depth articles on other AI models. We will also cover AI policies that can guide you and your team toward ethical and secure usage of these exciting new technologies.
Disclaimer: This article is a research project, provides general information about AI data usage and does not constitute legal advice.
If you have any further questions about the above, contact me via lowa@amstlegal.com or set up a meeting directly here .
Negotiation Skills to Focus on at the End of Year
At the end of the year, many businesses rush to finalize contracts, close important deals and meet last-minute deadlines. Having great contract negotiation skills are essential to be successful. It’s that annual push to finish the quarter & year strong before everyone disappears for well-deserved time off. This pressure often falls heavily on legal teams, procurement, sales managers and business leaders tasked with ensuring that high-priority contracts are negotiated and completed on time.
In this article ‘Discover 5 Ways to Speed Up Year-End Contract Closings’, we will explore which negotiation skills you need to succeed at the end of the year. Also see this article with more tips to prepare for the end of year rush in contract negotiations.
We will highlight four essential actions you can take right now – just days before the holidays – to effectively wrap up your end-of-year deals. We’ll also walk through key fundamentals to keep in mind throughout the year so that next holiday season feels less chaotic. No matter how much experience you have, I am sure that these practical tips will help you for successful year-end deal closings.
What we will cover:
- Prioritize crucial contracts.
- Maintain transparent communication with internal and external teams.
- Foster cross-team collaboration.
- Manage deadlines effectively.
Let’s dive in.
Why the End of the Year Can Feel Overwhelming When Involved in Contract Negotiations
For many organizations, the fourth quarter (Q4) is do-or-die time. Sales targets loom, and finalizing deals before the calendar flips can make the difference between achieving annual revenue goals and falling short. Meanwhile, everyone is juggling personal holiday plans, limited workdays and company events. All of this can your timelines and add complexity to negotiations and sign-offs.
It’s important to acknowledge this heightened intensity and plan accordingly. What often appears as a mere scheduling inconvenience may result in real losses if a signature doesn’t come through before December 31st. With limited business days left in the year, how can you maximize efficiency and productivity without losing sanity?
Looking Ahead: Contract Negotiation Fundamentals for a Less Stressful End of Year
Before we get into the four actions to take this week, let’s talk briefly about the broader fundamentals. If you can keep these 4 foundational pillars in mind throughout the year, you won’t be scrambling at the last minute next time.
1. Early Preparation and Prioritization
One of the best ways to avert holiday panic is by starting your contract prioritization well before December. In contract negotiations, if you treat every contract as urgent in the final weeks of the year, you will get stuck. Begin categorizing contracts by priority as early as Q3, identifying which are mission-critical and which can be safely pushed to the new year.
Actionable Steps for Better Preparation
- Create a rolling calendar: Outline all major deals and renewal deadlines. Update it monthly to keep everyone informed.
- Rank your deals: Use clear metrics (like projected revenue, strategic importance, or executive sponsorship) to determine which contracts are must-close.
- Build buffer time: Aim to finalize deals a week or two before the official holiday break. If last-minute changes occur, you’ll have a cushion.
2. Communication & Cooperation
As we discussed in this previous article, improved cooperation and communication will speed up legal processes and contract negotiations. Encourage an environment of open dialogue and teamwork from the start. Legal, sales, finance and procurement should be in sync on timelines and requirements.
Throughout the year, there should be trainings and teams should have frequent check-ins to help keep everyone aligned on strategies, improvements and cross departmental input. When the end of the year crunch time arrives, you’ll already have established rapport and processes to move swiftly.
Actionable Steps for Ongoing Cooperation
- Weekly or bi-weekly alignment calls: Keep relevant departments in the loop on contract statuses and expectations.
- Transparent pipeline reporting: Make sure sales forecasts are accessible to the legal team, so there’s no surprise rush in December.
- Encourage feedback loops: If an issue arises, escalate it early rather than waiting until the last few days.
- Training: departments should give training to each other during the year understand products, processes and priorities.
3. Standard Templates
As we have explained in previous blogs, setting up standard templates and clause libraries for routine contracts can save time and makes all the difference. If everyone works from the same template and standard pre-approved clauses, contract negotiations focus on key points rather than re-inventing the wheel every time.
Actionable Steps to Streamline with Templates
- Audit current contracts: Identify recurring clauses or sections across multiple deals.
- Implement version control: Store templates in a central, cloud-based location.
- Train stakeholders: Give internal teams a brief tutorial on how to use and customize the templates for common scenarios.
4. Implementation of Legal Tech & AI
Investing in Contract Management or Contract Lifecycle Management (“CLM“) and AI tools or other legal technology drastically speeds up contract negotiations, redlining and approvals.
What I particularly like is – if you have the right tool – that all contracts are handled centrally and are not scattered in the company. These tools can also automatically flag unusual terms, propose alternative wording, track changes and integrate e-signatures, reducing the manual workload.
Actionable Steps to Embrace Legal Tech
- Start small: Pilot a CLM tool on a specific contract type or business unit.
- Track ROI: Monitor how much time you save using automated workflows.
- Scale up: Gradually expand the tool’s usage across departments once it’s proven effective.
Pro-Tip: Implementing these fundamentals early in the year pays off when you hit the December crunch.
Four Actions to Take This Week in Your Contract Negotiations (Yes, You Still Have Time!)
Now that we’ve covered the broader, year-round strategies, let’s zoom in on the actions you can take right now to improve your contract negotiations – four days before the end-of-year holidays. It’s crunch time, but with a methodical approach, you can still cross the finish line successfully.
1. Prioritize High-Value Q4 Deals
Why it Matters:
Time is limited, so focus on the deals that actually must be negotiated and close before the holiday break. Not every contract currently on your desk is critical for year-end. Some might realistically belong to Q1 or Q2 of the coming year – postpose the contract negotiations to that time..
Key Question to Ask:
“Is this contract truly closing before the holidays, or can it wait until Q1 ’24?”
If it’s not high-priority, schedule it for a later review. Redirect your energy toward the deals that can realistically be finalized. This ensures you’re not losing energy on deals that don’t directly impact your Q4 numbers.
Action Steps
- Identify urgent deals: Compile a list of deals that must be signed by December 31st.
- Eliminate the noise: Put lower-priority contracts on the back burner until after the new year.
- Communicate priorities: Let your internal stakeholders know which contracts you’re prioritizing, so they don’t assume everything is a must-close.
Check:
- Are the contracts you’re spending the most time on truly the ones that align with your company’s Q4 goals?
- Have you clarified the timing of the contract negotiations with the sales and management teams?
2. Establish Clear Communication Channels in Contract Negotiations
Why it Matters:
Poor communication can derail even the simplest deal. With holidays looming, there’s no time for back-and-forth email delays or misunderstandings. Clarity on timing, process, and expectations keeps everyone accountable- it is part of any good contract negotiation.
Key Question to Ask:
“Do my customers and internal teams fully understand the timeline and process, or are they making assumptions?”
If everyone is on the same page, you’ll drastically reduce the risk of any last-minute surprises. Communication is especially crucial with external customers. They may have their own holiday schedules and organizational processes that can cause bottlenecks if not carefully managed.
Action Steps
- Daily touchpoints: If a deal is critical, schedule short daily check-ins (virtual or in-person) with key stakeholders.
- Transparent timeline: Document the final date to submit revisions, secure approvals, and obtain signatures. Share this timeline widely.
- Preempt obstacles: Ask your counterpart, “What could prevent us from signing this on time?” Address those issues immediately.
Check:
- Are your internal teams (legal, finance, sales) updated on each contract’s status daily?
- Do your external customers have a complete understanding of the steps needed to finalize the contract?
3. Foster Cross-Functional Team Collaboration
Why it Matters:
No complex contract closes in a silo – contract negotiations are a team sport. The legal team needs sign-offs from finance and management. Procurement might require additional approvals from leadership. Sales might need input from marketing. Silos create delays, confusion, and errors—especially when deadlines are tight.
Key Question to Ask:
“Am I getting stuck in the details that create delays, and could a quick internal phone call solve it?”
Avoid working in isolation on complicated terms. Pull in all relevant parties for a collaborative push. If something is unclear or contested, schedule a call. The final week of the quarter isn’t the time for elongated email threads. Focus your time on live contract negotiations. See our tips on these live negotiations here.
Action Steps
- Set cross-department meetings: In the last crunch, a 15-minute daily huddle can resolve issues faster than back-and-forth emails.
- Draft clear escalation paths: Decide in advance who has the authority to sign off or escalate if disagreements arise.
- Leverage technology: Real-time collaboration tools (e.g., shared contract portals, Slack channels) can provide instant updates.
Check:
- Is everyone who needs to approve or review a contract looped in early enough?
- Do you have a protocol for addressing high-level disputes or changes quickly?
4. Execute Deadline Management Rigorously
Why it Matters:
Missing a critical date or a necessary signature in the last week of Q4 can be the difference between success and failure. Year-end deadlines often come with little to no grace period. If the contract doesn’t close by December 31st, it likely moves to next year’s pipeline – impacting revenue targets and stakeholder expectations.
Key Question to Ask during Contract Negotiations:
“What are the exact steps needed for this contract to be executed by the deadline?”
List those steps—from last-minute edits to final legal approvals to e-signatures—and align your timeline with all decision-makers. Don’t forget about the logistics of traveling or out-of-office signatories. One absent signature can delay everything if not planned for.
Action Steps
- Create a master checklist: Outline every step required for each contract (legal review, internal approvals, signature scheduling).
- Plan a few days ahead: Don’t assume you can finalize everything at the stroke of midnight on December 31st. Aim to have signatures done at least a few days before the holiday break.
- Leave room for error: Build in buffers for unexpected events like system downtime, signatory travel, or additional negotiation points.
Check:
- Has every individual with signing authority confirmed their availability before the holidays?
- Are you proactively tracking each contract’s progress against a unified timeline?
Putting It All Together: A Roadmap for the Final Week of Negotiations
With the holiday clock ticking, your best moves are laser-focused prioritization, great communication between teams , collaborative teamwork and tight deadline management.
By combining these actions over the next few days, you’ll massively improve your odds of wrapping up critical deals. Remember to keep an eye on the fundamentals – early preparation, open communication, standardized templates and legal tech—so that next year, your holiday season won’t feel like a marathon sprint.
Bonus Tips for a Smoother Year-End Experience
Even if you have just a few days left before the break, here are some bonus strategies to make your life a bit easier:
- Use E-Signature Solutions: If you haven’t already, adopt an e-signature platform. Paper-based signatures in the final days can lead to shipping delays or the dreaded “I’m on vacation, I’ll sign when I’m back” scenario.
- Send (Early!) Friendly Reminders: People get distracted this time of year. A polite nudge via email or chat can keep deals top of mind.
- Confirm Receipt: After sending over final documents, confirm your counterparty has received them and is working on them. Sometimes emails get lost or stuck in spam.
- Celebrate Small Wins: For every contract closed, give your team credit. Positive reinforcement keeps morale up as you sprint toward the finish line.
- Prepare for Post-Holiday Catch-Up: Not every deal will close on time, no matter your best efforts. Have a plan ready for picking up negotiations in January without losing momentum.
Conclusion: Good Luck Closing Off Your Contracts Before the Holidays!
End-of-year contracting is not easy and it will be messy. Hopefully these tips will help you – which I pulled together in the past 20 years – trying to minimize the chaos at the end of each year. By prioritizing deals, clearly communicating, collaborating effectively and managing deadlines meticulously, your deals will close easier and with less stress.
Remember: The core pillars we discussed at the start – early preparation, cross-functional communication, standard templates & procedures and use of legal tech form the bedrock of a less stressful contract negotiation and management process. Implement them gradually, and you will notice a smoother Q4 (and end of Q2) next year. For even more detailed advice, be sure to check out our comprehensive guide here.
Good luck, and may your holiday season be filled with both successful deals and well-earned relaxation!
Need help?
For help with your contract negotiations and related processes, reach out to us via lowa@amstlegal.com or book an appointment with Robby Reggers here.
7 Tips How to Improve Live Contract Negotiation (&Examples)
Introduction
Long, drawn-out live contract negotiations where you don’t reach a result can drain your time, energy and patience. Whether you’re finalizing terms with a new SaaS vendor or ironing out details with a new customer, the process often feels slow and frustrating. But it doesn’t have to be this way.
By applying a few straightforward communication and contract negotiation strategies, you can streamline your live (online or in-person) negotiations, keep everyone focused and reach fair agreements faster. In this article ‘7 Tips How to Improve Live Contract Negotiation (& Examples)’, we will cover:
- seven tips to help you run more efficient live negotiations,
- then, answer five common questions that many small and medium-sized businesses (SMEs) have asked us; and
- finally, we’ll walk through a brief scenario showing how these tactics work in a real-world SaaS context.
7 Tips for More Effective, Streamlined Live Negotiations
1. Prepare in Advance
Preparation might sound obvious, but it’s often overlooked. Before you jump on a call, know exactly what you want—and what you can live without. Gather all the details that matter: pricing tiers, subscription lengths, service-level agreements (SLAs), data security requirements, and any key terms unique to your business model.
For instance, if you’re negotiating a SaaS contract, determine your must-have SLA features (like 99.9% uptime or a dedicated support channel) and understand how much you’re willing to pay for them. Knowing these details ensures you’re not scrambling during the call. You’ll respond faster to counteroffers and will not waste time on irrelevant points. The clearer your objectives, the quicker you can confirm or reject proposals on the spot.
To prepare effectively for our live negotiations, prepare thoroughly. Review your internal needs, compare the vendor’s standard terms to industry benchmarks and decide where you can compromise. Also, anticipate common sticking points – like automatic renewal clauses or extra fees for additional users – so you’re ready to address them. Thorough preparation reduces confusion and sets the stage for a focused, productive negotiation.
Be ready for the tough questions. See the Harvard Law School Negotiation preparation checklist here.
2. Set an Agenda and Stick to It
Without a clear roadmap, negotiations can meander and waste time. A simple agenda shared in advance keeps everyone aligned. List the key issues—such as pricing structure, onboarding timeline, renewal conditions and data protection terms – and let all parties know these are the topics to be covered.
When the call starts, refer to the agenda right away. If someone drifts off-topic (“Let’s also discuss a potential partnership feature for next year…”), you can steer them back: “That’s interesting, but let’s finalize the current subscription terms first as per our agenda.”
An agenda not only saves time but also keeps the atmosphere professional and respectful. Everyone knows what to expect, which reduces unnecessary back-and-forth. With a clear roadmap, you’re less likely to get bogged down in small details that don’t affect the final outcome.
3. Use Clear, Concise Language
Complex legal or business jargon and vague language can slow negotiations down. Stick to plain, direct language whenever possible. If you encounter a technical or legal term, clarify it right away. For example, if the vendor refers to a “Indemnification Clause” or “SLA” ask them to explain: “Can you clarify what this clause means in practical terms for our liability and what exactly the SLA will entail?”
By simplifying terms, you ensure both sides understand each other. Misunderstandings often lead to follow-up calls or extra email chains to fix what could have been settled earlier. Keep it simple: “We need a 48-hour response time for support tickets” is clearer than “We request timely fulfillment in accordance with standard SLA metrics.” Clear language reduces confusion, makes it easier to achieve agreement and speeds up the entire process.
Also, don’t just refer to a contract clause, memo or whitepaper that was shared, but explain in your own words.
4. Assign Roles and Responsibilities Within Your Team
If you have several team members on your side, assign clear roles before the call. One person should lead the conversation – this is the voice who guides the agenda and addresses the main points. Another can handle real-time edits to the contract (if you’re screen-sharing or using a collaborative doc), ensuring that agreed-upon changes are captured immediately. A third team member might be a specialist in a particular subject, etc.
This division of labor prevents people from talking over one another and ensures nothing falls through the cracks. For example, while the lead negotiator discusses the price tiers with the vendor, the notetaker can record the agreed terms, and the editor can update the master document in real-time. When everyone knows their role, the conversation flows smoothly. By the end, you’ll have a clear record of what happened and fewer reasons to schedule a second call.
When you know a particular point could be sticky, ensure that you have a specialist that joins the call to show your willingness to explain and to try yo reach agreement on the spot. Before the meeting, also ask the counterparty if their specialist is able to join so they can discuss the specific subject.
5. Actively Listen, Ask Great Questions and Validate the Other Side’s Points
Negotiations aren’t just about what you say; they’re also about how well you listen. When the other side speaks, give them your full attention. Summarize their points to show you’ve understood: “Great to hear that if we agree to sign a two-year contract, we will receive a 10% discount.”
By validating their input, you build trust and minimize friction. The other side feels heard and respected, making them more open to meet you halfway. If a vendor says they can’t offer more storage at the basic tier, acknowledging their position – “I hear you. Additional storage is challenging at this price point” – can calm tensions and open the door to creative solutions.
Don’t for get the tip to say “That’s Right” when your counterpart makes a great point. Read our article about this here.
Active listening also helps you avoid going in circles. When everyone feels understood, fewer clarifications are needed later. It’s a subtle step that speeds up the process by preventing repeated explanations or misunderstandings. Also see our article ’30 of the Best Questions to Ask in Any Negotiation’ here.
6. Leverage the Right Technology
The right tools can save a lot of time in negotiations. For example screen-sharing allows both sides to view and edit the contract simultaneously. Collaborative documents or contract management platforms let you highlight text, propose changes, and record agreements as they happen. Real-time chat tools can clarify small points without derailing the conversation flow.
Let’s say you are discussing a SaaS license agreement, you can highlight the pricing clause live, increase the user count and watch the other side’s response in real-time. This eliminates the need for lengthy email follow-ups after the call. Technology also helps ensure everyone is literally “on the same page,” reducing miscommunication and speeding up finalization.
Just remember to test your tools beforehand. Technical glitches waste time and damage the negotiation’s momentum. Ensuring everything runs smoothly keeps the process moving and makes it easier to reach an agreement.
7. Know When to Take a Break
Sometimes you hit an impasse. Maybe the vendor won’t budge on a crucial data security or liability clause or you can’t agree on cancellation terms. Instead of pushing on and raising tensions, suggest a short break: “Let’s take five minutes to review these points individually. We’ll come back with fresh perspectives.”
Stepping away from the screen allows everyone to rethink their positions. When you return, both sides might be more willing to compromise. A brief pause can save you from hours of drawn-out debate. Instead of forcing a decision amid rising frustration, you come back calmer and more solution-oriented, ultimately reaching an agreement faster.
5 Common Questions (and Answers) About Live Negotiations
1. How do I handle a party that dominates the conversation?
Use your agenda to maintain structure. Politely interrupt if they wander off: “I appreciate your input. To stay on track, let’s confirm the billing cycle terms first.” If dominance persists, consider switching negotiation formats, like proposing a written redline exchange before the next call. This allows for more balanced input and prevents one-sided monologues.
2. What if I don’t understand a technical or legal term they mention?
Ask for clarification immediately: “Could you clarify what this ‘auto-renewal clause’ entails?” A moment of asking now saves you from bigger problems later. Being upfront about what you don’t know shows professionalism and ensures no hidden surprises remain after signing.
3. How do I keep everyone engaged and focused?
Start by setting a time target: “We have one hour to finalize the user limits and support terms.” Recap progress after each point: “Great, we agreed on a 12-month term at $X per month. Next, let’s finalize the onboarding schedule.” Timeboxing and summarizing key decisions keep the conversation efficient and participants engaged.
4. What if I feel pressured to accept unfavorable terms just to end the call?
Acknowledge the urgency without conceding too quickly: “I know we’re close to wrapping up, but I need a moment to confirm these terms align with our internal policies.” Suggest a brief pause or a follow-up call if needed. It’s better to take a bit more time now than sign a bad deal you’ll regret later.
5. How can I ensure the terms agreed upon are actually implemented afterward?
End the meeting by summarizing important agreed terms, who is responsible for what and the next steps. Then send a written summary email or updated contract draft immediately after. Having a document both sides can refer to prevents “he said, she said” disputes and keeps everyone accountable for their promises.
A Quick Scenario: Negotiating a SaaS Contract in Live Negotiations
Imagine you run a growing marketing agency, and you’re negotiating a SaaS contract for a new project management platform. You’ve done your homework: you know your budget, the required user count, must-have integrations (like linking to your CRM), and the level of customer support you need.
Preparation:
Before the call, you decide that you need a minimum of 30 seats at a certain monthly rate. You also need a guaranteed response time for support tickets, integration with your CRM, and a flexible cancellation clause.
Agenda:
You send the SaaS vendor a short agenda:
- Pricing and number of seats
- Support response times and escalation policies
- Integration with CRM tools
- Cancellation and renewal terms
Clear Language:
On the call, you say, “We need at least 30 seats at $X per user per month, with a guaranteed 24-hour support response time. Can you confirm that’s possible?” This straightforward request helps the vendor respond faster. They might say, “We can offer 30 seats at that rate, but our standard support time is 48 hours.”
Assigning Roles:
In your team, you’re the lead negotiator. Your colleague is ready to update the shared Google Doc with any changes. Another teammate listens and takes notes on agreed points. While you talk pricing, your colleague highlights the relevant clauses in the contract so everyone can see what’s changing.
Active Listening:
The vendor expresses concern about meeting the 24-hour support response. You summarize: “You’re saying 24 hours might be tight. How about 36 hours as a compromise?” This shows you listened and are open to meeting them halfway.
Leveraging Technology:
As you discuss these terms, you screen-share the contract. Your teammate edits the pricing clause and support terms in real-time. Everyone sees the new wording instantly. No follow-up emails are required later to confirm what was changed.
Taking a Break:
If you reach a deadlock—say, the vendor wants a strict auto-renewal clause, and you want a more flexible cancellation policy—suggest a short pause. “Let’s take five minutes so we can consider some options.” After the break, you might propose a partial compromise: a 30-day cancellation notice instead of 60 days. The vendor, now calmer, might agree.
By the end of the call, you summarize: “We’ve agreed on 30 seats at $X per month, a 36-hour support response, full CRM integration within 30 days of signing, and a 30-day cancellation notice. I’ll send an updated contract draft today, and you’ll review it by Friday.” Sending that draft immediately seals the verbal agreement in a written form, reducing any risk of confusion.
Building Confidence Over Time in Live Negotiations:
These tactics become easier the more you use them. After a few live negotiation sessions, you’ll know when to push back, when to pause, and how to keep the conversation clear and constructive. Over time, refine your agenda templates, prepare standard clauses, and train your team to handle their roles seamlessly.
Improving your negotiation approach doesn’t just save time. It also helps maintain positive relationships with vendors and clients, who appreciate smooth, respectful interactions. Everyone wins when deals close faster and with less friction.
Also, don’t forget to check out our list of negotiation Books to read to become a better negotiator.
Conclusion:
Long live negotiations where you reach no results don’t have to be your standard. By preparing in advance, setting a clear agenda, speaking plainly, delegating tasks within your team, listening closely, using the right tools, and knowing when to step back, you can drastically shorten negotiation times and reduce stress.
This structured approach leads to fairer deals struck in less time. Instead of hours or days spent ironing out small details, you’ll wrap up contracts more efficiently. You’ll protect your interests and keep your partners happy, setting the stage for productive, long-term relationships.
Need help?
For help with your contract negotiations and related processes, reach out to us via lowa@amstlegal.com or book an appointment with Robby Reggers here.
9 Actions to End the Year Strong in Contract Negotiations
Introduction
As the end of Q4 2024 approaches, legal and commercial teams face pressure to finalize contracts before the holiday break. The final weeks of the year present unique challenges, with tight deadlines, competing priorities and holiday disruptions. Success depends on aligning your team and prioritizing the most critical contracts with a focus on maintaining clear communication throughout the process.
With 20 December 2024 as the (most likely) last day to finalize contracts, prioritizing deals that directly impact your company’s goals is essential. At the same time, addressing dormant deals and preparing for next year when time allows will ensure a smooth transition into 2025.
What We Will Cover in This Article
To finish the year strong and enter 2025 with momentum (while feeling rested), you need to focus on the following now:
- Bring your teams together to align on priorities and processes.
- Devote your full attention on clear communication, both internally and with customers.
- Prioritize Q4 2024 deals, address dormant contracts and prepare Q1 2025 deals if time permits.
In this article, we will outline 9 actionable tips to help you organize your efforts, streamline workflows, and avoid a year-end scramble.
9 Actions to Close Out the Year Successfully
1. Align Priorities Across Teams
The first and most crucial step is to bring all relevant teams together—Legal, Sales, Procurement, and Operations. Without alignment, resources can be wasted, and critical deals may slip through the cracks.
- Host Priority Meetings: Convene key stakeholders to discuss active contracts and set clear priorities.
- Set Realistic Timelines: Share anticipated closing dates and deadlines, taking into account holiday schedules.
- Address Bottlenecks Early: Identify potential obstacles, such as approvals or customer feedback, and plan to resolve them.
- Document Priorities: Create a shared list of deals and communicate expectations to all involved.
Why This Matters: A lack of alignment leads to confusion and delays. Clear communication ensures everyone is working toward the same goals.
2. Finalize Q4 Deals That Matter
After aligning priorities, focus your efforts on closing Q4 2024 deals that are most important to your company’s financial and strategic objectives. These contracts often involve high-value agreements or partnerships where delays could have serious consequences.
- Assign dedicated resources to critical deals.
- Regularly update internal and external stakeholders on progress.
- Use the tools and processes your company has designated for tracking and approvals.
Key Question: Which deals are tied to year-end financials or essential company objectives?
3. Prioritize High-Value Deals
Within the Q4 pipeline, high-value deals deserve special attention. These agreements often require more complex negotiations, multiple approvals, or input from senior decision-makers.
- Set weekly check-ins with deal teams to track progress.
- Identify potential risks or delays early and create contingency plans.
- Ensure executive stakeholders are available for final approvals.
Why This Matters: High-value deals typically have the greatest impact on your company’s year-end performance and strategic goals.
4. Push Small Deals to Close Quickly
While high-value contracts demand attention, small deals should not be overlooked. These agreements are often easier to finalize and can contribute to year-end results with minimal effort.
- Set a goal to close smaller contracts early in December.
- Automate workflows where possible to speed up execution.
Why This Works: Small deals are low-hanging fruit that boost momentum and free up resources for larger negotiations.
5. Address Dormant Deals Immediately
Dormant contracts – those that you have chased but have not heard back from or are unresolved – should be reviewed and addressed now.
- Discuss and determine if these deals can be realistically closed before year-end.
- For contracts that cannot be finalized, communicate plans to defer them to 2025.
Key Tip: Don’t let dormant deals distract from critical Q4 priorities. Clear them out to create focus and clarity.
6. Communicate Proactively with Customers
Proactive communication is essential for keeping deals on track. Schedule touchpoints with high-priority customers to confirm timelines and address any outstanding issues.
- Share clear expectations for closing terms and deadlines.
- Follow up consistently to maintain momentum.
- Ask if certain specific closing requirements are important for the customer – for example signing protocols & timing.
Why This Works: Clear communication reduces uncertainty, builds trust, and helps avoid last-minute surprises.
7. Enable Your Team with Clear Instructions and Tools
Ensure your team has access to the right tools and a clear understanding of how to use them. This includes contract management systems, signing tools, and repositories.
- Save contracts in designated locations for compliance and easy access.
- Track progress on negotiations, approvals, and signatures using your company’s approved tools.
- Refresh your team on contract thresholds, policies, and escalation processes.
Why This Matters: Standardized workflows minimize confusion and ensure contracts are executed efficiently.
8. Review Processes, Not Just Contracts
A successful year-end close depends on streamlined workflows, not just finalizing agreements. Take time to review and address any gaps in your processes.
- Are all approvals aligned and documented?
- Have compliance requirements been met?
- Are decision-makers available for final signatures?
Why This Matters: Process inefficiencies can derail even the most well-negotiated deals.
9. Review Q1 2025 Deals Only If Time Permits
Finally, if your team has capacity, begin preparing for Q1 2025. Use this time to lay the groundwork for contracts that will need early attention next year.
- Draft templates and standard terms.
- Schedule initial meetings with stakeholders for early January.
- Address any known issues that could cause delays.
Key Tip: Keep your focus on 2024 until all critical contracts are on track to close.
Conclusion: Focus on What Matters Most
As the year draws to a close, success hinges on prioritization and clear communication. Focus your efforts on:
- Bringing your teams together to align priorities and streamline processes.
- Closing critical Q4 2024 deals that directly impact financial and strategic goals.
- Resolving dormant deals or deferring them to 2025 with a clear plan.
- Preparing for Q1 2025 only after year-end priorities have been addressed.
By following these steps and equipping your team with the right tools and processes, you can ensure a smooth year-end close and start 2025 with confidence.
We can also recommend a great article on this subject by Bari Williams, Head of Legal & Legal Content at LegalOn Technologies, see link on contractnerds.
For help with your contract negotiations and related processes, reach out to us via lowa@amstlegal.com or book an appointment with Robby Reggers here.
10 Tips You Need to Know to Improve Your Contract Templates
1. Introduction
Sales teams, entrepreneurs, procurement specialists and legal professionals all share one common need: contracts that are clear, efficient and enforceable. When done right, they accelerate deals, minimize risks and build trust. Contract Templates are great to achieve this.
These legal documents do not only formalize agreements but also protect business interests by clearly defining risks, responsibilities and expectations between the contractual parties. However, as important as contracts are, the process of managing them can be complex, time-consuming and inefficient.
The solution is standardizing contracts in templates. This can be in the form of template NDA’s, Custom Agreements, General Terms & Conditions, Master Services Agreements, Order Forms or even letters. The key is to create easy to use, not overly complicated (and short where possible!) templates that cover the company’s risk. A great practical book on this is ‘Sign Here: The enterprise guide to closing contracts quickly’ by Alex Hamilton.
Creating and maintaining strong, streamlined contract templates can help companies enhance efficiency, reduce legal risks and optimize resource allocation. Also see my article on this here. However, simply having templates is not enough. Organizations need to ensure that they are accessible, up-to-date and aligned with both legal and business objectives.
This article series, “10 Tips You Need to Know to Improve Your Contract Templates”, was written to help businesses tackle these challenges head-on. We will explore key strategies to improve contract templates, ensuring they become valuable tools that drive efficiency, consistency and strategic growth.
Let’s start by understanding why we need templates in the first place and how to overcome common issues that arise from their use. This Introduction article will be followed up by 10 more articles including a practical, step-by-step guide explaining how to improve templates, creating better processes and rolling them out successfully.
2. Why we need (better) Contract Templates
Companies need to work on avoiding overcomplicating contracts and to focus on improving contract workflows.
One effective way to achieve this is by creating standardized templates for the company’s most common agreements. For example, Non-Disclosure Agreements (NDAs), Terms & Conditions (T&C), Data Privacy Agreements (DPA), Service Level Agreements (SLA), Master Services Agreements (MSAs) etc.
Standardized contract templates can also significantly reduce the time spent on repetitive drafting. It enables faster contract creation, review, and approval, which not only speeds up business processes but also frees up valuable resources for more strategic tasks.
Moreover, contract templates help maintain consistency in the language, terms, and legal safeguards across all agreements, reducing the risk of errors, contradictory clauses, and legal disputes. By ensuring that key legal protections are consistently applied, contract templates minimize legal risks and contribute to more efficient, reliable contract management overall.
However, despite the clear benefits of using standard contract templates, many companies struggle with effectively implementing them. The correct use of these templates often remains a stumbling block, and failure to address common issues can lead to inefficiencies, delays, and legal risks.
In the next paragraphs, we will first highlight what the 4 most common issues are with Contract Templates, secondly what the consequences are of these issues, finalizing with explaining are the 9 advantages of having great (so not complicated & long) Contract Templates.
3. Common Issues with Contract Templates
While standardized contract templates can improve efficiency, many organizations encounter obstacles that prevent them from fully realizing their potential by using contract templates. In practice several factors can hinder the successful implementation and utilization of such contract templates.
Four of the most common issues with contract templates include the following:
Complexity
Overly complex and lengthy templates often result in confusion and create more questions than answers for the commercial team who use the templates in practice. The language may contain specific legal terms or overly complex wording, that can be difficult to comprehend, which in turn can slow down the contract review process. We also often spot that templates are outdated and no longer fit with the products & services that the company is providing.
Accessibility
Locating and using the correct template can be a challenge. The absence of a clear system for accessing the right templates often results in the use of outdated or unauthorized versions, creating further inconsistencies.
Limited Resources
Many businesses lack the resources to dedicate time to continuously improve their contract templates. This lack of investment often leads to templates that are outdated or irrelevant to current business needs.
Excessive Legal Review
Despite having templates in place, Legal often still need to review and negotiate a high volume of contracts due to the lack of well-defined processes and the issues mentioned above. This increases the burden on the Sales, Procurement & Legal department and slows down the contracting process.
The existence of these obstacles highlights the importance of having a clear strategy and process for managing contract templates. Understanding these common issues is a first step towards addressing them and ensuring smoother contract workflows.
4. Consequences of Contract Template Issues
The issues described above surrounding contract templates can have significant, far-reaching consequences for businesses in several areas. The idea of having solid contract templates in place relies heavily on whether the templates are easy to use, if they are consistent and whether they have been reviewed and continuously get managed properly. Mainly, this revolves around inefficiencies connected to the contract templates due to poor contract template management.
Incorrect, overcomplicated and long templates result in the following issues:
Delays in Contract Creation, Negotiation and Closing
Complex and outdated templates can prolong the time it takes to finalize contracts due to the need to involve legal professionals. If the template is too complex, it won’t be possible for anyone to use the template at issue. Additionally, this can cause delays that may disrupt operations and hinder business growth that otherwise would have been possible.
Increased Risk Exposure
Contracts that are inconsistent or not properly reviewed make the company vulnerable to legal and financial risks, including disputes, compliance issues, and unfavorable terms. This is especially the case if there are several contract templates that cover different areas.
Higher Workloads
The inefficiencies of managing contract templates translate to additional work for Legal and other involved departments. This means that they must spend more time resolving problems, negotiating terms, and handling unnecessary contract revisions since they are the only ones who are fit for the job. In turn, this creates less time for them to focus on more complex, high-value deals.
Strained Business Relationships
Poor contract management can also erode trust with clients, vendors, and partners. If the contracting process is slow, confusing, or fraught with errors, it can negatively impact business relationships and damage the company’s reputation. For instance, the counterparty can get the impression that the inconsistent templates may reflect your way of doing business.
In other words, the consequences of poorly managed contract templates extend far beyond operational inefficiencies. To prevent these issues, companies need to reassess their contract management strategies and prioritize the development of high-quality templates.
5. Results of having State-of-the-Art Templates
When businesses take the time to develop and maintain strong contract templates, they unlock a wide range of benefits that positively impact both their day-to-day operations and long-term strategic goals. These benefits arise from the ability to standardize contract processes, reduce legal risks, and enhance collaboration between departments.
Nine key advantages are:
Shorter Contract Negotiation Times
High-quality templates serve as a strong starting point for contract negotiations, eliminating the need to negotiate basic terms and conditions from scratch. Since most of the standard clauses are pre-approved and align with company policy, both parties can focus on customizing specific deal points rather than revisiting the entire contract.
Increased Efficiency and Simplified Contract Handling
Streamlined templates reduce the time and effort required to draft, review, and approve contracts. This reduces the administrative burden on both Legal and business teams, allowing them to focus on higher-value tasks such as negotiating complex deals or working on strategic initiatives. In fast-paced industries, this can provide a critical competitive advantage.
Reduced Workload
With standardized, well-organized templates, the Legal department can reduce the number of contracts that require individual review. This means that only the most complex or high-risk contracts will require in-depth legal review. It allows the Legal team to focus on more strategic activities, such as risk management or regulatory compliance.
Enhanced Consistency and Contract Quality
High-quality templates ensure that contracts across the organization are aligned with company standards, reducing the risk of errors and inconsistencies. Enhanced consistency also helps to build trust with external parties, as they can rely on the fact that the company’s contracts follow a predictable structure.
Risk Mitigation
Strong contract templates serve as a built-in risk management tool, ensuring that all agreements contain the necessary legal safeguards to protect the company’s interests. By ensuring that contracts contain the necessary legal safeguards and are compliant with applicable regulations, companies can better manage their legal and financial risks.
Decreased Legal Costs & Improved Cost Efficiency
With fewer contracts requiring in-depth legal review, companies can reduce their legal expenses and allocate their budgets more efficiently. This cost efficiency allows companies to allocate their legal budgets more effectively, focusing on complex matters that truly require expert legal input.
Stronger Business Relationships
A smooth and transparent contracting process enhances trust and collaboration with clients, vendors, and partners. It also reduces delays and confusion, making it easier to finalize agreements quickly and without unnecessary back-and-forth.
Optimized Resources
Well-organized contract processes help businesses make the most of their available human and financial resources. By standardizing and streamlining contract workflows, companies can minimize the time and effort spent on repetitive tasks, allowing teams to focus on strategic growth initiatives rather than administrative burdens.
Empowered Commercial Teams
With easy access to effective contract templates, commercial teams can take the lead in negotiations without the constant need for legal intervention. When teams have access to well-structured, pre-approved templates, they can confidently lead discussions and close deals faster.
In summary, adopting state-of-the-art contract templates into your business processes leads to a wide range of benefits. Not only do they increase efficiency and reduce legal costs, but they also improve the consistency and quality of your contracts. By streamlining contract workflows and fostering better business relationships, high-quality templates help companies mitigate risks, optimize resources, and accelerate growth. Implementing these templates is a smart investment that delivers long-term operational and strategic advantages.
6. Experienced Results of Contract Optimization
Throughout Robby Reggers’ 20-year career advising businesses on contract optimization within legal departments, the most successful outcomes were achieved by companies that embraced a collaborative methodology for template optimization. By refining contract templates with input from across the organization, companies can ensure that their contracts are not only legally robust, but also fully aligned with business objectives and responsive to customer needs.
For help improving contract templates, negotiations and related processes, reach out to us via lowa@amstlegal.com or book an appointment with Robby Reggers here.
Wat is een NDA (Geheimhoudingsovereenkomst)?
Inleiding
Non-disclosure agreements (NDA’s) of Geheimhoudingsovereenkomsten zorgen ervoor dat vertrouwelijke informatie alleen wordt gebruikt voor het specifieke doel dat tussen de partijen in een zakelijke relatie is overeengekomen.
In de zakenwereld, waar ideeën, innovaties, financiële informatie en bedrijfsgeheimen de sleutels tot succes zijn, spelen NDA’s een belangrijke rol in het beschermen van vertrouwelijke informatie. Dit artikel `Wat is een NDA (Geheimhoudingsovereenkomst )?´ biedt een uitgebreid overzicht van de basis van NDA’s in de context van Business to Business (B2B) transacties.
Wat is een NDA
Een NDA, ook wel een Geheimhoudingsovereenkomst genoemd, is een juridisch bindend contract tussen twee of meer partijen om vertrouwelijke informatie te beschermen die tijdens hun zakelijke relatie mogelijk wordt gedeeld. Meer specifiek is vertrouwelijke informatie niet-openbare informatie van een bedrijf die schade kan toebrengen als deze openbaar wordt gemaakt. Meestal wordt in een NDA een lijst opgenomen van de vertrouwelijke informatie, zoals bedrijfsgeheimen, knowhow, product- en technologiegerelateerde informatie, kortingen, klantenlijsten, verkoop- en financiële informatie, bedrijfsplannen, enzovoort.
Wanneer en waarom hebben we een NDA nodig?
In de B2B-context kunnen NDA’s een essentieel hulpmiddel zijn om eigendomskennis, bedrijfsgeheimen en andere vertrouwelijke data te beschermen die belangrijk zijn voor een bedrijf om zijn concurrentievoordeel te behouden. Deze gevoelige informatie moet daarom duidelijk en zorgvuldig worden gedefinieerd in de NDA. Let er echter op dat de definitie niet te beperkt is, zodat je geen belangrijke categorieën over het hoofd ziet. Door een goed opgestelde NDA te gebruiken, kan je bedrijf waardevolle informatie beschermen tegen concurrenten of andere derden die voordeel zouden kunnen halen uit het openbaar maken van dergelijke informatie.
Doelstelling van een NDA
De primaire doelstelling van een NDA is ervoor zorgen dat de verstrekte gevoelige informatie veilig wordt gebruikt en behandeld, om te voorkomen dat deze zonder de juiste toestemming en goedkeuring van de partij die de informatie verstrekt, wordt gebruikt of openbaar wordt gemaakt. Een NDA wordt vaak ondertekend aan het begin van een zakelijke relatie of voordat een zakelijke relatie wordt aangegaan.
Praktijkvoorbeelden
Een veelvoorkomend praktijkvoorbeeld is de situatie waarin een technologiebedrijf van plan is gespecialiseerde softwareoplossingen te verkopen en aan te bieden aan een zakelijke klant. De bedrijven beginnen met het bespreken van de manier waarop de software kan worden geïntegreerd in de systemen van de klant, en bepalen de prijs voor de integratie en het gebruik van de software. Hierbij kan het technologiebedrijf inzicht geven in zijn prijzen, Service Level Agreements (SLA), beleid en software, terwijl de klant op zijn beurt zijn uitdagingen en bedrijfsplannen kan delen.
Tijdens dit proces zijn de bedrijven van plan om documenten uit te wisselen die niet openbaar zijn, en dus vertrouwelijk. Om deze vertrouwelijke informatie te beschermen, wordt geadviseerd dat de bedrijven een NDA ondertekenen voordat ze deze informatie met elkaar delen. Zo’n NDA kan worden beëindigd wanneer de partijen een definitief klantcontract ondertekenen, waarin ook bepalingen over vertrouwelijkheid zijn opgenomen.
Hoe beschermt de NDA vertrouwelijke informatie
Net als bij andere juridische contracten, heeft het schenden van een NDA belangrijke juridische gevolgen. Afhankelijk van de ernst van de schending kunnen de consequenties variëren van rechtszaken en financiële boetes tot – in extreme gevallen – strafrechtelijke vervolging. Het schenden van een NDA kan ook schadelijk zijn voor de reputatie van een partij, wat langdurige gevolgen kan hebben voor het bedrijf, vooral in zakelijke relaties en sectoren waar vertrouwen en vertrouwelijkheid van groot belang zijn.
Hoewel claims en rechtszaken met betrekking tot het schenden van een NDA niet veel voorkomen, kan het zeker gebeuren dat een bedrijf een boete moet betalen voor het schenden van vertrouwelijkheid. AMST Legal heeft in het verleden meerdere keren advies gegeven over dergelijke kwesties.
Welke NDA heb je nodig? Verschillende soorten NDAs uitgelegd.
Er zijn verschillende soorten NDA’s die kunnen worden gebruikt, afhankelijk van de specifieke omstandigheden en de behoeften van de betrokken partijen. Hieronder staan de drie meest voorkomende soorten NDA’s:
Unilaterale (Eenzijdige) NDAs
Bij een unilaterale NDA legt één partij, meestal de verkoper, de andere partij de verplichting op om de informatie te beschermen en deze niet te openbaren of te gebruiken voor andere doeleinden dan wat in de overeenkomst is vastgelegd. In een B2B-context worden unilaterale NDA’s vaak gebruikt tussen kopers en verkopers. Bijvoorbeeld, een Biotech bedrijf (verkoper) kan een unilaterale NDA gebruiken om te voorkomen dat de koper gevoelige informatie onthult die hij heeft verkregen tijdens de aankoop van producten of diensten, zoals intellectueel eigendom en computertechnologie. Dit type NDA komt ook vaak voor bij openbare aanbestedingen en bij RFI- (Request for Information) en RFP- (Request for Price) situaties.
Bilaterale, Tweezijdige of Wederzijdse NDA
Deze NDA die het meest voorkomt wordt overeengekomen tussen twee partijen die beide vertrouwelijke informatie met elkaar delen en waarbij beide gebonden zijn aan vertrouwelijkheidsverplichtingen. Bilaterale NDA’s worden vaak gebruikt wanneer partijen aanzienlijke hoeveelheden vertrouwelijke informatie moeten uitwisselen tijdens hun onderhandelingen of zakelijke relatie. Dergelijke situaties kunnen zijn: joint ventures, leverancierscontracten of fusies en overnames.
Multilaterale NDA
Deze NDA tussen drie of meer partijen komt het minst voor. Een multilaterale NDA wordt overeengekomen tussen drie of meer partijen, waarbij ten minste één partij gevoelige informatie deelt met de andere partijen en deze partijen vertrouwelijkheidsverplichtingen oplegt. Dit type NDA vereenvoudigt de administratie en het papierwerk voor de betrokken partijen, omdat ze niet meerdere unilaterale of bilaterale NDA’s met elkaar hoeven overeen te komen. In een zakelijke relatie waarbij drie of meer partijen betrokken zijn, en alle partijen vertrouwelijke informatie willen delen, kan een enkele multilaterale NDA de noodzaak van verschillende bilaterale NDA’s vervangen. Dergelijke situaties kunnen zich voordoen bij samenwerkingsverbanden, overheidscontracten (zoals defensie- en ruimtevaartcontracten) en consortiumovereenkomsten.
Conclusie
Een NDA is een essentieel juridisch instrument voor het beschermen van vertrouwelijke informatie in zakelijke relaties. Of het nu gaat om een unilaterale, bilaterale of multilaterale NDA, de overeenkomst zorgt ervoor dat gevoelige gegevens veilig blijven en alleen voor het beoogde doel worden gebruikt. In de B2B-context is het gebruik van NDA’s van groot belang om concurrentievoordeel te behouden, bedrijfsgeheimen te beschermen en vertrouwen tussen partijen te waarborgen.
Het schenden van een NDA kan juridische en financiële gevolgen hebben, maar kan ook leiden tot reputatieschade van een bedrijf. Het is dan ook cruciaal voor bedrijven om goed na te denken over welk type NDA het beste past bij hun specifieke situatie, om zo de vertrouwelijkheid van gevoelige informatie optimaal te waarborgen.
Bij vragen over NDAs kunt u altijd contact opnemen ons of meteen een afspraak inplannen via deze link.
NDA-skyldigheter: Vad du måste veta (3)
1. Inledning
Är du redo att fördjupa dig i sekretessavtal (NDA)? Vi gick igenom grunderna och centrala delar av sekretessavtal i del 1 här, och i del 2 här förklarade vi fyra vanliga klausuler som parter, definitioner och syftet med sekretessavtal. Nu ska vi utforska de viktiga sekretesskyldigheterna som gäller för den mottagande parten enligt ett sekretessavtal.
Lär dig hur du skyddar din känsliga information under affärspartnerskap med denna artikel “NDA-skyldigheter: Vad du måste veta”.
Fyra snabba fakta om NDA
Enligt ett NDA, vanligt benämnt sekretessavtal, går parterna med på att:
- Sekretesskyldigheter: Hålla information hemlig, använda den endast för det ändamål som anges i sekretessavtalet och inte avslöja den för obehöriga parter.
- Upprätthålla informationssäkerhet: Implementera rimliga säkerhetsåtgärder för att skydda informationens konfidentialitet.
- Undantag: I vissa fall gäller inte sekretessen, som när informationen är offentligt tillgänglig eller om upplysningar krävs enligt lag.
- Förstöra information: När konfidentiell information ska återlämnas eller raderas då sekretessavtalets syfte har uppnåtts.
Även om sekretessavtal vanligtvis har företräde framför lagreglering, kan särskilda lagar och förordningar tillämpas. Exempelvis sekretesslagar av olika slag, GDPR, arbetsrättsrättsregler och regler om företagshemligheter.
2. Sekretesskyldigheter för den mottagande parten
Begränsad användning av konfidentiell information
I ett sekretessavtal har den mottagande parten huvudansvaret för att skydda sekretessen. Detta innebär vanligtvis att den konfidentiella informationen endast får användas för det angivna ”syftet” enligt avtalet. Se vår tidigare artikel här där vi förklarar varför detta är viktigt och hur man korrekt formulerar syftet. Genom att göra detta säkerställer man att den konfidentiella informationen hålls hemlig och hindrar mottagaren från att avslöja den för en tredje part.
Ett välskrivet sekretessavtal bör uttryckligen begränsa mottagande part från att inte bara direkt och medvetet missbruka eller avslöja konfidentiell information, utan också från att göra det indirekt, vårdslöst eller oavsiktligt.
Utvidgning av tillåtna mottagare
En av de viktigaste delarna av ett sekretessavtal som kräver särskild uppmärksamhet är: “Vem får ta emot den konfidentiella informationen?”
Eftersom det ofta inte bara är parterna i sekretessavtalet som behöver få den konfidentiella informationen är det viktigt att utvidga dessa sekretessskyldigheter bortom den mottagande parten själv.
Vanliga exempel på tredje parter inkluderar:
- Professionella rådgivare såsom revisorer, konsulter eller advokater,
- Agenter, direktörer, anställda och
- Filialer/bolag inom samma koncern.
Se därför till att du inkluderar mycket tydliga definitioner av tredje parter som får ta emot den konfidentiella informationen och under vilka omständigheter.
Vanligtvis är dessa omständigheter att dessa tredje parter endast får ta emot den konfidentiella informationen om de har:
- ett behov av att veta informationen i samband med syftet (som definieras i sekretessavtalet), och
- juridiska skyldigheter för sekretess och icke-användning med avseende på den konfidentiella informationen som väsentligen liknar mottagande parts skyldigheter enligt sekretessavtalet.
Upprätthålla informationssäkerhet
Det är avgörande att förstå vikten av att skydda den konfidentiella informationen som delas. Om du tar emot konfidentiell information är det viktigt att förstå och acceptera att du är skyldig att implementera rimliga säkerhetsåtgärder. Detta inkluderar tekniska, fysiska och organisatoriska åtgärder för att skydda informationens konfidentialitet och förhindra obehörig åtkomst eller avslöjande.
Undantag från sekretesskyldighet
Normalt innehåller sekretessavtal vissa undantag från de sekretessskyldigheter som åläggs den mottagande parten. När det kan bli fallet inkluderar nedan fyra olika exempelsituationer.
Allmänt känd information
Om informationen blir offentligt tillgänglig för allmänheten (utan att mottagande part brutit mot sekretessavtalet) upphör sekretessskyldigheterna för mottagaren och dess dotterbolag att gälla som bindande.
Tidigare vetskap
Om informationen införs i en offentlig domän (utan att mottagande part brutit mot sekretessavtalet) befriar också mottagaren och dess dotterbolag från sekretessskyldigheterna.
Tredje-parts avslöjande (inklusive dotterbolag)
När mottagaren får information från en tredje part som har laglig rätt att avslöja den, behöver de inte längre hålla informationen konfidentiell.
Rättsliga krav
Ett viktigt undantag tillåter mottagaren, dess dotterbolag/filialer eller tredje parter att avslöja konfidentiell information genom en domstolsorder eller myndighetsbegäran. Vanligtvis ska den avslöjande parten informeras innan informationen lämnas ut för att följa den juridiska processen.
Återlämnande/destruering av informationen
När syftet med att dela konfidentiell information är uppnått kan den avslöjande parten begära att den mottagande parten återlämnar eller förstör den konfidentiella informationen som fortfarande är i deras besittning.
Till exempel kan den avslöjande parten begära att den mottagande parten återlämnar kopior, prover och annat material som innehåller konfidentiell information samt kräva att den mottagande parten raderar/förstör digitala data som innehåller konfidentiell information.
På grund av dagens komplicerade IT-miljöer hos de flesta företag kan det vara antingen väldigt utmanande eller kostsamt att helt eliminera data. Därför råder vi att inkludera formuleringar som: ”parterna är överens om” i sekretessavtal gällande destruering av digital data.
Specifika lagar kan tillämpas
Även om sekretessavtal vanligtvis omfattar reglering av sekretesskyldigheter är det viktigt att inse att specifika lagar och förordningar kan åsidosätta eller komplettera avtalsregleringen i vissa situationer.
Exempel på sådan rättsreglering inkluderar: sekretesslagar, GDPR, arbetsrättsregler och regler om företagshemligheter.
Dessa lagar och förordningar kan ställa ytterligare krav eller medge mer vittgående undantag, så beakta dessa skyldigheter när du ingår eller tolkar ett sekretessavtal för att säkerställa fullständig efterlevnad. Dessutom, se även denna artikel från Hogan Lovells för ytterligare information om ämnet.
3. Slutsats
Medan titeln på denna artikel “Skriv inte på det där NDA:et än! Förstå dina skyldigheter först” kanske kan låta lite dramatisk, understryker den en viktig poäng: sekretessavtal underskattas ofta.
Att förstå sekretesskyldigheter enligt sekretessavtal, särskilt för den mottagande parten, är avgörande. Det är viktigt att inte förhasta sig och skriva under dessa avtal utan att helt förstå den potentiella påverkan på ditt företag och din handlingsfrihet.
Genom att noggrant granska och förstå dina skyldigheter kan du skydda dina intressen, undvika kostsamma rättsliga tvister och säkerställa ett framgångsrikt partnerskap.
Kontakta oss på +31650608964 eller lowa@amstlegal.com om du behöver mer information eller rådgivning om detta ämne.
How to Renegotiate Contracts: What You Need to Know
Introduction
We’ve all been there: whether it’s asking for a salary increase, renegotiating your apartment lease, or updating a business contract due to new contract terms or a higher price.
Renegotiations are a part of life, both personally and professionally, yet these can be one of the most challenging conversations we face. How can we renegotiate contracts better and why is it different to renegotiate an existing contract?
In this article ‘How to Renegotiate Contracts: What You Need to Know’, we will explore the essentials of contract renegotiation: what it is, why it matters and when to consider it.
After advising a large US / Netherlands based client through critical contract renegotiations in the past years and working on contract renegotiations since 2004, we are looking forward to share our experiences and tips on contract renegotiations.
What Is a Contract Renegotiation?
Definition of Contract Renegotiation
Revisiting Terms
Contract renegotiation involves modifying the existing terms of a contract between parties. Unlike initial negotiations, where the focus is on establishing a new agreement, renegotiation aims to adjust current terms to better align with evolving needs and circumstances.
This is particularly difficult as there is already an existing relationship and contract, but the current terms need to be amended.
Building on Relationships
Renegotiations are built on the history and trust already established between parties. This foundation can facilitate more open communication and a collaborative approach to finding mutually beneficial solutions.
Contracts We Renegotiate Most Often
Salary Agreements
Negotiating a raise or changing your compensation package involves revisiting the terms of your employment to better reflect your current capabilities, growth, contributions and market value.
Lease Agreements
From apartment rentals to office spaces, lease agreements often require renegotiation, especially when circumstances change. You might seek to adjust the rent, extend the lease term, or modify maintenance responsibilities.
Commercial Contracts
Businesses frequently renegotiate contracts with suppliers, clients, or partners to adapt to changing market conditions, change pricing, update service offerings or address performance issues.
Service Agreements
As companies grow or change course, the scope of work with service providers may need updating. Renegotiating service agreements ensures both parties are aligned on expectations and deliverables.
Subscription Services
In our digital age, we often engage in contracts for software, memberships, or utilities. Renegotiating these can lead to different pricing, additional features or terms that better suit your needs.
The Nature of Contracts
Dynamic Agreements
Contracts should be viewed as living documents that may require adjustments over time. As businesses grow and markets change, what was appropriate at the contract’s inception may no longer be suitable.
Common Misconceptions
There’s a common belief that contracts are immutable and must remain static until they expire. This misconception can hinder businesses from adapting to new opportunities or challenges.
Why Renegotiate a Contract?
Adapting to Changing Circumstances
Market Fluctuations
Economic changes can impact pricing, supply and demand. Renegotiating contracts allows businesses to adjust terms in response to inflation, currency fluctuations, products changes or shifts in market dynamics.
Technological Advancements
New technologies can alter operational needs or capabilities. For example, adopting automation tools may change service requirements, necessitating contract updates.
Regulatory Changes
Laws and regulations evolve, and contracts must comply with current legal standards. Renegotiation ensures that agreements remain legally sound and avoid potential penalties.
Contract Improvements
Due to professionalization of the sales, procurement and/or legal teams, contracts need to be updated to enhance the customer experience, increase efficiency and decrease risks.
Addressing Performance Issues
Underperformance
If one party fails to meet their obligations, renegotiation provides an opportunity to address these issues formally. This could involve modifying expectations, timelines, or remedies for non-compliance.
Overperformance
Conversely, exceeding expectations may open doors to expand the scope of work or adjust compensation to reflect the added value.
Enhancing Mutual Benefits
Optimizing Terms
Renegotiation can improve conditions for better efficiency or profitability. This might include adjusting payment schedules, delivery terms, or service levels to better suit both parties.
Strengthening Relationships
Open communication during renegotiation can reinforce partnerships. Demonstrating flexibility and a willingness to collaborate fosters trust and long-term cooperation.
Resolving Disputes
Clarifying Ambiguities
Contracts may contain unclear terms that lead to misunderstandings. Renegotiation allows parties to clarify these ambiguities, reducing the risk of future conflicts.
Mitigating Risks
Adjusting terms can reduce potential liabilities. For instance, modifying indemnification clauses or adjusting responsibilities can protect both parties from unforeseen risks.
When to Renegotiate a Contract
Contractual Milestones
Renewal Dates
Contract renewals are natural points to revisit and adjust terms. Before automatic renewals take effect, reviewing the agreement ensures it continues to meet both parties’ needs.
Project Phases
In long-term projects, transitions between phases offer opportunities to assess performance and make necessary adjustments.
Significant Business Changes
Mergers and Acquisitions
Organizational changes can affect contractual obligations. Renegotiation ensures that contracts align with the new entity’s structure and strategy.
Financial Shifts
Changes in budget, funding, or financial health may require contract adjustments to reflect new economic realities.
External Factors
Economic Downturns or Booms
Macroeconomic conditions can influence market stability. Renegotiating terms can help manage risks during downturns or capitalize on growth during booms.
Legal or Regulatory Updates
New compliance requirements may necessitate changes to contract terms to ensure ongoing legality and enforceability.
Early Warning Signs
Consistent Issues
Repeated problems may indicate misaligned terms. Addressing these through renegotiation can prevent further complications.
Feedback from Stakeholders
Input from employees, customers, or partners can highlight areas where the contract may need adjustments.
Contract Updates
Contract Template Improvements
Improvements in contract templates due to professionalization of the Company or mitigation of risks.
Change in Contract Setup
Linked to the previous point, the contract template structure is subject to change. For example, instead of using one large contract, the contract template is now divided into general terms and conditions that links to various addendums that can be found on the website of the company.
This is one of the best ways to decrease negotiation time, improve contract management and mitigate risks for the company.
Conclusion
Recap of Key Points
Contract renegotiation is a vital tool for businesses to adapt to changing circumstances, address performance issues, enhance mutual benefits, and resolve disputes.
Recognizing when to renegotiate – such as at contractual milestones, during significant business or contract changes, or in response to external factors – can prevent risks associated with outdated agreements.
Call to Action
Businesses should regularly assess their contracts and consider renegotiation as a strategic tool for maintaining strong, mutually beneficial relationships.
Closing Thoughts
Adaptability is essential in today’s business environment. Embracing contract renegotiation not only safeguards your interests but also fosters partnerships built on trust, collaboration, and shared success.
Need assistance with your contract renegotiations?
Contact us today via lowa@amstlegal.com or +31650608964 to discuss how we can help or book a meeting with us via https://amstlegal.com/appointment.