Just because someone manages contracts for a company doesn’t necessarily guarantee that negotiation comes easily to them. If you don’t feel like you have a natural talent for negotiation, contract renewal can spark feelings of uncertainty. The following vendor contract renewal best practices can improve your chances for success.Read More
It is often said that negotiation is an art form and a skill that must be carefully honed with diligent practice. Unfortunately, for government agencies and other public sector organizations with rather tight budget constraints, it may not be entirely realistic to devote the resources and personnel hours to developing this craft. In addition, brief timelines and expectations for immediate action often hinder local governments from bargaining effectively. But, this inability to haggle for the best deal can end up costing the government a lot of taxpayer dollars when they are subjected to overly expensive and/or inefficient contracting arrangements. Here is how local governments can and must negotiate better contracts:Read More
Startups and small businesses are often hesitant to retain the services of legal counsel, generally due to concerns over the hefty price of such advice. This is certainly understandable, although it may end up proving costly in the long run. With contract drafting, in particular, it is very important to confer with legal counsel to ensure that the bargain struck is equitable and allocates risk appropriately. There may be issues down the road that lead to expensive litigation if a company fails to receive the input of an attorney with respect to a legally binding document such as a contract. Rather than be reactive and shell out a bunch of money for a lawyer to clean up such a mess, it is wise to be proactive and engage counsel as early as practicable. Here are four ways to leverage legal counsel when it comes to contract negotiation and drafting:
Hopefully, dealing with underperforming contracts is not something that your company encounters very often, if ever. In the unfortunate event that it does occur, the contract management team must be well equipped to address the situation swiftly and effectively. Ideally, when there is even a mere indication of performance problems, it must be tackled before it becomes a much larger issue with costly repercussions. Here is what to do about an underperforming contract:Read More
Communication and transparency are key in the early stages of the contract drafting process. From navigating contract terms to making sure involved parties are on the same page, the beginning of the contract cycle relies on an open and ongoing dialogue between individuals for the best results.Read More
It may be hard to believe that there is so much to say about contract interpretation that it necessitates multiple blog entries, but the content of these particular installments is really just the tip of the iceberg. Contracting is a routine part of business operations, and even though it has gone on for centuries, it continues to be a complicated process, frequently subject to confusion and disagreements. And, more often than not, these disputes center on conflicting interpretations of a contract's terms. So, here is a continuation of the discussion on the principles of contract construction.Read More
In a business transaction that involves the sale and purchase of some good or service, the seller of that good or service usually has a bit more power and influence when it comes to shaping the contract between the parties. However, to ensure a positive working relationship, not to mention one that will endure beyond the initial transaction, it is important for sellers to take into consideration what most buyers want from their vendors. Here are several things to keep in mind:Read More
There is a fair amount of discussion and disagreement on this topic, but the simplest answer to this question is, “it depends.” The length of a contracting relationship is contingent on so many variables, including the complexity of the agreement, as well as the resources and investment at stake. In a vast number of business transactions, these agreements last between two to five years. Although there is no hard and fast rule with respect to the optimal contract duration, there are several things to take into consideration when deciding on this matter.Read More
For many companies, the team that negotiates a contract is different from the team that drafts the arrangement. Of course, a completely different team then oversees the management of the finalized agreement. This is an understandable and efficient allocation of human capital, but a complete division of labor is often one of the underlying reasons that contractual relationships go sour and contract disputes arise.
Although it may not be realistic for the management team to actively participate during all phases of the contracting cycle, they should become engaged in the process as early as possible because their insight will help prevent the emergence of certain issues. Here is how their early engagement and input can help:
This is the fourth entry in a series dedicated to the many facets of contracting, as well as how each particular facet and all its relevant components relate to contract management. You can read Part 1 here. You can read Part 2 here. You can read Part 3 here.
During contract negotiations, the parties' goal is to reach a mutually acceptable agreement. Unfortunately, during this phase of the contracting process, both parties are primarily focused on risk allocation and revenue maximization. As a result, there sometimes isn't much thought or effort put into what has to happen once the ink has dried on a finalized agreement. However, the manner and outcome of the negotiation process will have a tremendous impact on contract management. Here are some things to consider during the negotiation process: