How do I approach contract negotiation without making things really tense?
August 19, 2012 9:08 PM Subscribe
What are some common "win-win-style" tactics or phrases used during contract negotiation to get portions changed/removed? From time to time I need to write or talk about those issues without escalating any tensions.
Typically this happens with boilerplate contracts that come across my desk, with TONS of stuff in there that makes me uncomfortable. I usually don't feel like it really reflects my client's (comparatively optimistic) attitude toward the project. But I don't want to seem like the one weirdo who needs the entire contract rewritten his way.
Typically this happens with boilerplate contracts that come across my desk, with TONS of stuff in there that makes me uncomfortable. I usually don't feel like it really reflects my client's (comparatively optimistic) attitude toward the project. But I don't want to seem like the one weirdo who needs the entire contract rewritten his way.
Best answer: One approach I have used for leases was to say that I recognized their need to have clause X in the contract, and it probably addressed their need for Y, but I would be more comfortable with very standard contract language Z instead. I think that works best though when X is unusual, extreme, or nonstandard. And I've only tried this when relations were fairly friendly and they wanted to work with me. If they're a large entity, or you need them more than they need you, then the situation is much harder.
posted by Hither at 9:30 PM on August 19, 2012
posted by Hither at 9:30 PM on August 19, 2012
Best answer: Being uncomfortable and not being able to work with the contract can be light-years apart. I usually just cross out stuff that's not remotely relevant and then suggest alternative phrases for other stuff. "Life of the project" for "in perpetuity" for example.
posted by Ideefixe at 9:50 PM on August 19, 2012
posted by Ideefixe at 9:50 PM on August 19, 2012
Response by poster: >I usually just cross out stuff that's not remotely relevant
Can you talk more about that? Do people ask you why you did it and if so do you reply, "that's not remotely relevant?"
posted by circular at 9:53 PM on August 19, 2012
Can you talk more about that? Do people ask you why you did it and if so do you reply, "that's not remotely relevant?"
posted by circular at 9:53 PM on August 19, 2012
Best answer: Its helpful to have a third party you can blame it on. "I know this is silly, but my lawyer is stressed out about this clause" or "You know how those contracts people are, always obsessing over technicalities." If that isn't an option, you have to address the actual issue head-on -- explain why you need the change. If you strike a punitive clause that only improves your side of the deal, only a fool would be persuaded it was a win/win. Some things can be painted that way. For instance, you can probably make a case that binding arbitration over disputes will save you both money over litigation.
posted by Lame_username at 10:32 PM on August 19, 2012 [1 favorite]
posted by Lame_username at 10:32 PM on August 19, 2012 [1 favorite]
Best answer: eh, I embrace being the one person who actually reads the boilerplate. At this point no one questions it.
posted by fshgrl at 10:35 PM on August 19, 2012
posted by fshgrl at 10:35 PM on August 19, 2012
Just came in to mention "Getting to Yes" but Sticherbeast was far to quick for me.
posted by Kid Charlemagne at 11:28 PM on August 19, 2012
posted by Kid Charlemagne at 11:28 PM on August 19, 2012
Best answer: +1 to Ideefixe. I just redline what I don't like, and treat those parts like what they are -- new terms we haven't discussed.
If they ask you why you crossed something out, just say something like, "it's outside the scope of our conversation, it doesn't help my client but it exposes them to liability and it's unnecessary for the deal. If this clause is important to you, I can review it and offer you some alternative terms."
If you offer alternative language, they generally don't object.
Also, if you're dealing with attorneys on the other side, you can be pretty blunt. Lawyers are trained to hear and say "NO" pretty forcefully.
If you can't manage these approaches, talk in terms of your client's expectations. "Look, my client expects this to go smoothly, don't you? There's no way he's going to agree to liquidated damages if he misses a deadline."
P.S., you're not a weirdo, you're a rep looking out for the client. If the contract is out of whack, it's their fault, not yours. Correct it, and close the deal. If they won't budge, it's probably not a deal you want to be in anyway.
posted by ScarletPumpernickel at 1:10 AM on August 20, 2012 [5 favorites]
If they ask you why you crossed something out, just say something like, "it's outside the scope of our conversation, it doesn't help my client but it exposes them to liability and it's unnecessary for the deal. If this clause is important to you, I can review it and offer you some alternative terms."
If you offer alternative language, they generally don't object.
Also, if you're dealing with attorneys on the other side, you can be pretty blunt. Lawyers are trained to hear and say "NO" pretty forcefully.
If you can't manage these approaches, talk in terms of your client's expectations. "Look, my client expects this to go smoothly, don't you? There's no way he's going to agree to liquidated damages if he misses a deadline."
P.S., you're not a weirdo, you're a rep looking out for the client. If the contract is out of whack, it's their fault, not yours. Correct it, and close the deal. If they won't budge, it's probably not a deal you want to be in anyway.
posted by ScarletPumpernickel at 1:10 AM on August 20, 2012 [5 favorites]
Response by poster: Thanks everybody, those answers are helpful.
posted by circular at 9:38 AM on August 20, 2012
posted by circular at 9:38 AM on August 20, 2012
Best answer: I haven't read Getting To Yes, but I really liked Difficult Conversations by the same authors, which was assigned reading in my law school negotiations class. I vaguely remember it as a quick, authoritative read that made me feel more prepared for all kinds of situations. (And FWIW, I'm pretty allergic to self-help business books in general.) It focuses on samples of tense conversations from the authors' academic research, and offers alternative ways to handle the conversation. If there are actual tensions arising in your negotiations, it'll give you a treasurehouse of practical phrases you can use to defuse them.
But for boilerplate contracts in particular, I agree with Ideefixe and ScarletPumpernickel that there may be no tensions in the first place. It usually works just to edit the contract the way you want it and send them a redline. "I made a few changes. Let me know if this works for you and I'll [cut you a check/send you a signed copy/get started on your website/whatever]." The likelihood is that they don't feel any more ownership over the boilerplate than you do, and won't object to any of your changes. If they do object to a few of them, then you've just identified some actual issues to work out before the deal is signed, and you can go from there.
This is total speculation, but when you say "I don't want to seem like the one weirdo" it sounds like you might be giving social concerns more weight than they deserve here. From your profile, it sounds like you're talking about boilerplate contracts that your clients send you when they hire you for tech services? In that case, the basic expectation and appropriate behavior is that you will be super optimistic in your communications with the client, and also be privately as creative as you can in imagining what might go wrong, and redraft the contract to be as favorable to you as possible if any of it does. (By preference, you'd be sending them your own contract drafted by your own lawyer with the same goal.) That's simply part of being a professional, and if I had to bet I would guess the tension is all on your end. Think of it like charging rates high enough to keep you in business -- it feels awkward to name the rate, but that's how this works, and if they can't roll with it they're not the clients you want.
Apologies if I'm reading way too much into your question. I hope this helps.
posted by jhc at 9:46 AM on August 20, 2012 [1 favorite]
But for boilerplate contracts in particular, I agree with Ideefixe and ScarletPumpernickel that there may be no tensions in the first place. It usually works just to edit the contract the way you want it and send them a redline. "I made a few changes. Let me know if this works for you and I'll [cut you a check/send you a signed copy/get started on your website/whatever]." The likelihood is that they don't feel any more ownership over the boilerplate than you do, and won't object to any of your changes. If they do object to a few of them, then you've just identified some actual issues to work out before the deal is signed, and you can go from there.
This is total speculation, but when you say "I don't want to seem like the one weirdo" it sounds like you might be giving social concerns more weight than they deserve here. From your profile, it sounds like you're talking about boilerplate contracts that your clients send you when they hire you for tech services? In that case, the basic expectation and appropriate behavior is that you will be super optimistic in your communications with the client, and also be privately as creative as you can in imagining what might go wrong, and redraft the contract to be as favorable to you as possible if any of it does. (By preference, you'd be sending them your own contract drafted by your own lawyer with the same goal.) That's simply part of being a professional, and if I had to bet I would guess the tension is all on your end. Think of it like charging rates high enough to keep you in business -- it feels awkward to name the rate, but that's how this works, and if they can't roll with it they're not the clients you want.
Apologies if I'm reading way too much into your question. I hope this helps.
posted by jhc at 9:46 AM on August 20, 2012 [1 favorite]
Response by poster: Great answer, jhc. Usually I'm quick on the draw sending out my own contracts, or a client asks for my contract, or I tell them I have one ready to send over, but sometimes I end up getting the client's boilerplate. And of course I have no problem addressing the issues but wanted to figure out some useful tools before leading with my creative imaginations rather than helpful negotiation language. :) Thanks for sharing your experience and insights.
posted by circular at 10:35 AM on August 20, 2012
posted by circular at 10:35 AM on August 20, 2012
This thread is closed to new comments.
posted by Sticherbeast at 9:24 PM on August 19, 2012