Contract Negotiatons: How to Avoid Negotiation Peaks? Part 1

Negotiating commercial contracts is always a daunting task, but is particularly complicated at the end of Quarter. We have written a series of tips on how to avoid these negotiation peaks, using my experience gained on this topic since 2004, as I have found that now a great time to start preparing for the end of Q3 and especially for the highest peak of the year (end of Q4).

If we all embrace the goal of reaching a steady negotiation rhythm, we are able to unlock benefits like improved decision making, streamlined processes, more joy at work and stronger relationships. Replace rushed contract negotiations & discussions with a strategic plan that allows for efficient and optimal contract negotiations.

As Commercial Contracting Experts, we focus on the following two scenario’s:

Scenario 1: negotiating your own contracts with buyers of your Products & Services: Customer Contracts.

-Teams involved: Sales, Account Management, Legal, Finance, Management, etc.

Scenario 1: negotiating contract of other companies to buy their products: Vendor & Supplier Contracts.

-Teams involved: Procurement, Finance, Facility, IT, Legal, Management, etc.

Top 10 common Commercial Contracts

–         Confidentiality Agreement (NDA)

–         Order Form

–         Master Services Agreement (MSA)

–         General Terms & Conditions (GT&C)

–         License Agreement

–         Framework Agreement

–         Partner Agreement (Reseller, Distribution, Incentive Agreement)

–         Service Level Agreements (SLA)

–         Statement of Work (SOW)

–         Data Privacy Agreement (DPA)

First Tip: start your preparation & planning and list your priorities now.

Are the teams your work with aware that the contracts you are working on need to be signed soon – particulary before end of Q3 or Q4??

Contact your team members this week to inform them of any upcoming contract negotiations.

Four Critical Factors: The following four Critical Factors will prepare you to work towards a steady negotiation cycle:

1. Early Preparation, Planning and Prioritization

2. Communication & Cooperation

3. Standard Templates & Procedures.

4. Implement Legal Tech & Digital Solutions

Bonus: specific actions for the last weeks of each quarter.

In the next posts in this series we will provide you with the specifics of the four Critical Factors and share practical tips for the teams involved, especially Legal, Sales, Procurement and Management.