Protecting Your Dreams

Twelve Tips for Contract Negotiation

Added on by Gamal Hennessy.

By Gamal Hennessy

There are a lot of tactics you can use to negotiate a contract, but the best move might be walking away.

Negotiating contract terms is often a source of anxiety for freelance professionals, independent artists and small business professionals. Many feel that any attempts at trying to get a better deal could lead to losing the business completely. Others are confused or intimidated by the obtuse legalese of contract language. Either way, many detrimental contracts are signed every day, leading to lost revenue, lost control and increased stress on the business.

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Eleven (Plus One) Tips for Contract Negotiation

The site Business 2 Community posted a piece this week entitled “Eleven Tips for Negotiating a Contract Like a Pro”. The unknown author lays out a broad strategy applicable to salary negotiations, sales negotiations and other kinds of contract discussions. His tips include:

1)    Make the effort to negotiate

2)    Know the basis for your negotiations

3)    Search for previous similar contracts

4)    Back up your claims

5)    Write your arguments down

6)    Ask questions

7)    Know who you’re dealing with

8)    Abandon your inhibitions

9)    Be Nice

10) Know your worth

11) Set the precedent

Each one of these points is useful as an element of contract negotiation strategy, although not all of them will be applicable or helpful all the time. I’d like to offer one more tip that will make all the others on this list more powerful.

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Your Breaking Point

You don’t need to do every deal.

Not every contract needs to be signed.

Some business isn’t worth the headache or the potential loss.

Knowing when to walk away from a negotiation will often help you close better deals in the long run.

Late last year I wrote a post about walking away from a bad deal (See How to Reject a Bad Contract). I offered five steps on how to leave a negotiation with grace and preserve your reputation in your industry. What I failed to point out in the earlier post was the inherent power that comes with setting limits. If you know what you are and are not willing to accept before discussions start, you’ll:

1)    Have a measuring stick to you can use to compare the other sides offers

2)    Display a sense of professional power by not looking desperate to take any deal on the table

3)    Gain the freedom to pursue a better deal later

Of course, there will be times when you’re not in a position for aggressive negotiations (See Negotiating Power in Creative Contracts). And some deals will be just fine right out of the box and you won’t need to engage in protracted negotiations at all. But knowing how to push back and when to walk away are powerful skills for freelance professionals and business owners of all types.

Have fun.
Gamal

PLEASE NOTE: THIS BLOG POST IS NOT A SUBSTITUTE FOR LEGAL ADVICE. IF YOU HAVE SPECIFIC CONTRACT ISSUES OR QUESTIONS, DISCUSS THEM WITH YOUR LEGAL ADVISOR OR CONTACT C3 AT gamalhennessy@gmail.com FOR A FREE CONSULTATION.

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