Negotiations of Contracts Getting agreement on what was agreed

Introduction  Negotiations, if successful, end in a contract and the contract is subject to negotiations.  Contract negotiations are about ensuring that the two parties set out in a clear and an enforceable manner the elements that have been agreed.  Once a contract is signed, further negotiations are not permitted.

Understanding the contract  A contract is a set of short paragraphs or sentences called articles or clauses.  The structure of a contract follows established principles or rules.

Sequence for Opening Contract Negotiations  The Buyer will send out a draft contract after receiving, analyzing and negotiating the seller’s offer.  The seller will receive the contract and thereafter the two sides will meet to negotiate the contents.

Preparations for Negotiations  Contract negotiations are about positioning and clarification.  The resources necessary to negotiate a contract must be on hand: –Lawyer –Translator (unless everyone is fluent in the language of the contract) –Relevant technology and management personnel

Beginning the negotiations  After receiving an initial draft contract, both sides will seek management direction on what has to be negotiated.  Negotiators will be given directions on what concessions may be made.

What should be Negotiated  Negotiations are about whether or not to include sections, paragraphs, subparagraphs, or clauses.  Negotiations are about the use of specific words and the punctuation of each clause.  All elements that have been previously negotiated will be the subject of negotiation in the contract.

Language  The contract negotiations should be in one language in order to be consistent.  If the contract is to be prepared in two languages, the priority of one language needs to be stated.

Follow up  Always ensure that everyone is up to date after each negotiating session so that any mistakes or errors of omission can be corrected at the next meeting.

Conclusion  The most important fact to remember –Contract negotiations are about precision and clarity. They are designed to ensure there are no ambiguities or misunderstandings. –A mistake as small as misplacing a “,” can cost thousands of dollars later.