Negotiation Strategies March 16, 2012

Contract Negotiation Strategies

Contract negotiation strategies become important when you have gone through the process of selecting a vendor to provide a product or service, and you've come to the point in the process where you have to negotiate the contract. Now, as I've mentioned before, negotiation is negotiation no matter where it happens...

Contract negotiation strategies become important when you have gone through the process of selecting a vendor to provide a product or service, and you've come to the point in the process where you have to negotiate the contract.

Now, as I've mentioned before, negotiation is negotiation no matter where it happens. So whether you are entering into a contract negotiation with a large parts supplier for your job, or with a contractor to redo your kitchen in your home, you need a working contract negotiation strategy.

Remember, your outcome for this process is to work with your vendor as a partner. This means the negotiation process must be a both win- where both of you feel well satisfied with the outcome.

A big mistake that people make at this stage is focusing too much on price, and trying to "bleed the other person dry".

This is not the foundation for a strong and long-lasting relationship.

When you are entering a contract negotiation, keep in mind the idea of being a partner to this person- and a good partner, so that both of you get your needs met.

Successful contract negotiations rely on both parties having their needs addressed, and when an equitable and mutually agreeable arrangement has been finalized.

To assist in this process, be certain to discuss several key areas, including:

  • All terms and conditions, as well as pre-existing situations and prerequisites for the agreement

  • A clear explanation of what products, good, services, and other items are included in this contract

  • Specify who will do what, and by when

  • Specify directly what compensation will be, and what the terms are for receiving compensation (for example, satisfactory samples, work completed on time)

  • Specific dates to begin and end the project, and terms of renewal if applicable

  • Description of potential roadblocks or obstacles and how these will be handled

  • Some description of how the relationship will continue past this initial agreement, if both parties are willing.


When working through a contract negotiation process, be sure to address these issues, in addition to any others specific to your situation.

Remember, you always get what you negotiate. And it's better in contract negotiations to be extremely clear than not clear enough.
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