Do you negotiate contracts regularly?
Do you get bogged down by what you want in the contract that you lose sight of how much you want the deal? Why is that?
Why is it that we get so invested in how we want to see something happen that we cannot accept a different option that achieves the same result?
I see this all the time. Everyone wants a deal to happen, but one side is so focused on something they want a certain way that you have to go back and forth several times before you can convince them what you are proposing achieves the same result. Remember, when you are working together with someone in business and you enter into a contract, contract negotiation is for everyone’s benefit.
Focus on the end result in your contract. Sometimes, you have to give on the way you get there. Make a list of the points that matter most to you, those that are not flexible, and those that need to be covered, but the details don’t matter as much. During contract negotiation, you should keep those priorities in mind.
There are some issues that matter for your business. Some things that must be covered. But, it is difficult to say they are “non-negotiable”. For example, I often software developers not to sign an agreement that uses “work for hire” language. (If you aren’t sure what that is, I covered it in episode 6 of the Podcast.) That does not mean that it is a non-negotiable term. It means that the developer needs to stop and consider the deeper implications of that language for their business.
For software developers, “work for hire” language can have substantial impact on a business that develops software. Using an old piece of code from another project in a work for hire agreement could potentially give away that code. That could have implications with other intellectual property agreements the software developer has and their ability to use the code later if they need it.
Of course, this is just an example. Are there terms in your industry that make you nervous when you see them in a contract?
In any case, sometimes there is a work-around solution. The point is, you should always consider the larger picture before simply saying a term in a contract is “non-negotiable”. If you are really planning to make the business relationship work, you need to work together to get the contract to say what it needs to say to make the relationship work. In some cases, you may have to be firm in your position because you cannot think of a way around the language you are fighting for. In that case, let the other side know. Let them know you want to make it work, but you just can’t work around this provision. Don’t try to play “hard ball”, be open and honest. Make your contract work for you.
Have you ever found a creative solution, during contract negotiation, for contract language that you never thought would work? Let me know about it!