8 Fatal Mistakes In Contract Negotiations and How To Improve
As Houston business attorneys, there are several mistakes and missed opportunities that we have observed that are made in contract negotiations, such as:
Both parties proceeding to conduct business without having a final agreement in place
Putting off difficult issues and not including them in an agreement hoping they become easier to resolve over time
Poorly drafted performance obligations
Weak or non-existent remedies
Poor document change tracking and proofing to ensure that all agreed upon changes are included in the final contract
Accepting "standard contracts" without a thorough review to customize terms to follow the agreed upon transaction
Poor vetting of vendors, suppliers, or others
Having no back-up plan in case the transaction does not close due to the parties not completing contract negotiations
"Principal ground is often won or lost in discussions before and during the negotiations and drafting of the contract."
--- GREGORY PHILLIPS, HOUSTON BUSINESS ATTORNEY
Although all of the above items are important, the principal ground is often won or lost in discussions before and during the negotiations and drafting of the contract. Therefore those who are serious players in negotiations must have excellent negotiating skills just like those used by a poker player or a savvy car buyer to work well in business negotiations.
Some of these skills are intuitive to master negotiators who have an innate talent. The good news: many of these negotiation skills can be learned.
5 Strategies To Improve Your Negotiating Skills
1. ATTEND A NEGOTIATION STRATEGY WORKSHOP
An excellent way for anyone to improve their negotiation skills is to attend a reputable negotiation strategy workshop. These workshops tend to focus on:
Live role-playing that builds trust and confidence and helps develop skills around creative concessions and negotiation challenges.
How to solve a party's interests rather than confront their position.
How to engage in bargaining that achieves creative solutions.
Tactics in collaborate negotiations -- how to recognize them, when it is appropriate to use them, and how to defend against them.
Learn to recognize different styles in negotiations
Strategies that address complex issues, diverse stakeholders, multiple parties, and shifting power.
Develop an effective plan and strategy for any negotiation.
Identify power sources and how to leverage power to your advantage.
Skills to manage emotions, cultural differences, difficult conversations, the use of technology and other nuances of negotiating.
Some workshops you may want to consider attending:
The Effective Negotiating seminar offered by Karrass is considered by many to be the most popular negotiating program in the world. For those interested, there is a workshop coming to Austin on May 20-21, 2019, and one in Dallas on June 10-11, 2019.
Houston Negotiation Workshop
We are considering hosting a KARRASS negotiation workshop at our Houston office later this year. If you are interested in attending this 2-day workshop and want more information, please let us know by completing the form below. We will email you with details in the near future.
For Beginner and Advanced Negotiating Skills. Also for those attorneys who want to sharpen their skills they provide a Best Negotiating Practices Workshop for Lawyers. Watershed Associates is one of the most sought-after sources for negotiating workshops. They receive over 2,000 searches a month for their workshops.
American Management Association provides an online and live 2-day workshop. While this workshop is not entirely around contract negotiation, it does focus on negotiation skills, insights, and competencies required in negotiations. Like Watershed Associates, this is a highly sought-after workshop.
2. READ ABOUT SELLING AND NEGOTIATING
Recommended books:
Love Is The Killer App
While this book is not about negotiations or selling it is worth reading to help you think about "value-added" and "knowledge-added" services you can bring to your business or in this case, contract negotiations.
Crucial Conversations
This book is in general about communicating effectively and is perfect for people who don't usually negotiate. It emphasizes preparation and transforming unpleasant emotions into powerful dialog through persuasion rather than demands.
Getting to Yes: Negotiating Agreement Without Giving In
This book is a classic and is the most influential book on negotiating ever written. The best quote in the book: "The method of principled negotiation is to decide issues on their merits rather than through a haggling process focused on what each side says it will and won't do. It suggests that you look for mutual gains whenever possible and that where your interests conflict, you should insist that the result be based upon some fair standards independent of the will of either side."
Negotiation Genius: How To Overcome Obstacles and Achieve Brilliant Results at the Bargaining Table and Beyond
This book will provide you with the mental habits and proven strategies you need to achieve great results in any negotiation.
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3. GET CLARITY ON THE GOALS IN YOUR NEGOTIATION
This point might seem obvious, but the reality is many people go into a negotiation without thinking about what they ultimately want to walk away with or their back-up plan if negotiations fail.
"Management is doing things right, leadership is doing the right things."
--- PETER DRUCKER
4. NEGOTIATE TOWARDS A WIN-WIN OUTCOME
A "win-win" outcome is the best result. Although this may not always be possible, through negotiation, it should be the ultimate goal. Suggestions for alternative strategies and compromises need to be considered at this point. Compromises are often positive alternatives which can often achieve more significant benefits for all concerned compared to holding to original positions.
4. PRACTICE SILENCE
One of the most successful tactics in negotiations is keeping your mouth closed and to listen. Often, we focus on what we want so much that we forget it’s to our benefit to practice silence to ensure we are heard, that the other party understands something is non-negotiable, and to listen to what is being presented.
While there are obviously more strategies to improve your negotiating ability, these five skills are an excellent start to improving your negotiating skill.
We made it easy to get a basic understanding of mergers and acquisitions. Our comprehensive guide will help you.
Hiring some to be an inside counsel can be costly and unaffordable. General Counsel Services offers an alternative.
Top 20 Reasons Startups Fail --- Yes, Legal Challenges is one of the top 20 reasons.
6 reasons we should protect intellectual property.