“Most of my competitors just sign the thing and accept the terms. The contract is totally one-sided.” my client sighed…Who is your quarterback in this negotiation?
In fact, this client did sign as well and gave up on any negotiation. However, such need not be the way to negotiate a contract if you are a vendor, sub-contractor, or prospective bidder. The contract regardless of the terms has to comply with the law and many contracts are outdated, reruns of old forms that business people pull out of the drawer of the file cabinet and re-use without any understanding that the law changes. In fact, contracts have to be mutually agreed to and bargained for and any professional relationship starts here on how you negotiate with your next customer. So it is important to review and evaluate what is valid and what is not, what may be unconscionable or unduly burdensome in the contract terms that may leave the agreement unenforceable even though signed by the parties.
In some cases, contrasts do not get signed and relationships continue without attention to renewals obligation under the contract leaving the parties in an implied contract — the writing no longer valid.
In Massachusetts, all contracts carry with them a Covenant — a promise — of Good Faith and Fair Dealing. This applies whether the contract is in writing or not.
TAKE IT OR LEAVE IT
This is the standard low-budget strong arm. “If you don’t sign it I’ll give it to someone else!” Beware of this, not only for legal purposes but related purposes. Most complicated relationships may not have the necessary terms covered in the agreement which may be to your benefit. Focus on payment terms, collection, liability shifts and what your specific obligations are under the agreement. Most often the terms that should cause you difficulty are not issues that will come up in your relationship or the nature of the services.
In the take, it or leave it — do neither — rather try to sidestep the form and add an addendum that counters or water down the hardcore term you are hoping to avoid or revise. Always seek specificity finding terms that are undefined and define them you can change the contract significantly in these ways and if the other side is not paying attention they see it as a mere form change. It is not uncommon that these agreements have conflicts and you can bring those up as clarifying points to assist in the negotiation to soften the hardcore “take it or leave it” approach.
Typically these things go down to the wire, so you have no room for negotiation. So plan ahead and review months before renewal periods arrive. Simply place them on a calendar in your office and call a lawyer to manage them for you. A little preparation goes a long way, if you are an incumbent you have the opportunity to discuss the nature of the job or work and methods to improve so that you can attempt to get those in the contract renewal, in short, the contract negotiation is ongoing all the time positioning yourself to improve the performance and challenge the other side in the negotiation to move in your direction.
KNOW THE LAW
Depending upon your business there are professional or business associations that may keep up on issues that your contract addresses — know them better than the other side and you win. Knowledge is always power in a negotiation and busyness can be cancer if you don’t take the time out to anticipate changes and understand them. The other side will get to them first and close the door on you.