Working out a business contract can be a stressful time. A lot may be at stake, especially if you wish to partner with a client or another business on a major endeavor. Fortunately, it is possible to avoid mistakes that some entrepreneurs make when they negotiate a business agreement.
According to Harvard Law School, there are some factors that influence the outcome of a contract negotiation. You may improve your chances of coming out of a negotiation with a contract that serves your interests by employing the following steps.
Allow for enough negotiating time
Business negotiations can put some people in an intense emotional state. This may lead to poor decision making in an effort to get the contract finished and signed. However, you could end up signing a contract you do not fully understand and/or does not meet your goals if you negotiate in an intense state of mind.
Giving yourself and your legal counsel more time to work on a contract may help all parties involved make clearer decisions. You might not be able to bring the negotiation down to a slow pace, but you should plan for break periods so that all parties can sleep and have time to temper emotions after a hard round of negotiation.
Make sure you understand the negotiations
It is possible to gloss over certain details that may be critical to your contract. To gain a better understanding of how the negotiations are proceeding, consider reading through your deal documents, including memos and drafts. Look for any passages in the documents that do not reflect your intentions for your contract.
Get a clear reading of your contract
Naturally, you should read over drafts of your contract so you can verify that the negotiations are going your way. However, you may benefit by asking your legal counsel to read the contract back to you in plain English. It is possible you may not understand some of the legal terms in the contract. Your attorney might help you out by interpreting the jargon for you.
A reading of your contract may identify questions you have about the contract. Resolving unclear issues before the final signing might prevent you from agreeing to a contract that does not work as you intend.