The professionals involved in contract management must be skilled negotiators, as the contracting process requires patience, flexibility, and the ability to work well with others. Parties often go into a negotiation round with completely different goals and objectives, and they have to be prepared to make some concessions. Given that most companies strive to establish long-lasting business relationships with their contracting partners, it is important to negotiate in good faith and earn the other side’s trust. Here are some ways to ensure that happens:
Be Transparent and Forthcoming
If parties are going to enter into a contract with one another, they have to know that they can rely on the veracity of the other party’s statements. There are general principles of contracting that mandate good faith and fair dealing, and this includes a duty to be transparent. During the negotiation phase, the parties have to exchange information that will affect whether they will agree to certain terms in the contract agreement. As a result, it would be improper to withhold information or mislead the other side in any way. Both sides must be willing to be completely transparent and wholly forthcoming with respect to their expectations and abilities. Contract lifecycle management software helps foster transparency in contract negotiations even further.
Parties obviously enter into the negotiation phase with their own idea of what they hope to accomplish, but they cannot assume that they will get everything they want, especially if it will be at the expense of the other party. Both sides must exercise empathy and make a genuine effort to understand where the other side is coming from. The whole point of the negotiation process is to come up with a mutually satisfactory agreement, and this can only occur if each side is willing to be flexible and compromise. In far too many instances, the negotiations go off of the rails because one side makes outrageous demands or refuses to acquiesce to even minor requests from the other side.
Contracting can be a long drawn out process, so it requires a great deal of patience from all parties involved. Everyone clearly wants to get things done as quickly as possible, but speed should never occur if it means that quality and accuracy will be sacrificed. And, as previously mentioned, the negotiation phase of the contracting cycle is really just the beginning of the relationship. As a result, exhibiting patience from the get-go will go a long way once the real work begins, which is during the administration and management of the actual contract.
Maintain the Relationship
The key to earning trust is to establish a genuine relationship and to work at maintaining it. Business partners sometimes forget to do this once a contract is negotiated and drafted because they move on to the next thing. But, contracting partners can potentially lead to other business opportunities, so cultivating every relationship is vital. It is particularly important to start this from the very beginning stages when the parties first begin to negotiate, as this will really set the stage for how the relationship unfolds.
The Buyer's Guide to Contract Management Software
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