CONTRACT NEGOTIATIONS 101
“What? Like, its hard?”
10 THINGS YOU SHOULD KNOW WHEN NEGOTIATING YOUR CONTRACT…
But first – what is a contract?
A contract is a legally binding agreement.
con·tract
noun | ˈkäntrakt |
1 | a written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law:
‘The fashion designer entered into a contract agreement with the stylist to provide her with exclusive access to her Spring collection.’
verb
2 | ˈkänˌtrakt, kənˈtrakt | [no object] enter into a formal and legally binding agreement:
‘The stylist will contract with Naomi Designs to obtain exclusive rights to her Spring & Summer collection.’
What do you need to form a contract?
All parties must be in agreement (after all it is called an agreement, right?) – legally this means that an offer has been made by one party (i.e., I will pay you $500 if you advertise my product) & the offer has been accepted by the other party (i.e., I agree to advertise your product for $500).
A CLEAR agreement with mutual promises exchanged by both parties for things of value [aka consideration].
OFFER [+] ACCEPTANCE [+] CONSIDERATION = CONTRACT
C o n t r a c t | N e g o t i a t i o n s 1 0 1
noun | nəˌɡōSHēˈāSH(ə)ns |
Discussion aimed at reaching an agreement.
‘Typically, contract negotiations involve a bit of give & take between parties, in hopes of reaching an agreement.’
“You don’t get what you deserve, you get what you negotiate.”
Reviewing a contract? Entering a contract? Drafting a contract?
4. Be Prepared … get to know the party that you are negotiating with (whether it’s through your own research or conversation) and understand the industry that you are entering into. Outline your needs & wants. Strategize. Review the contract before conducting negotiations & jot down any questions you have while reviewing the agreement.
5. Do some research. Knowledge is power. The more information you have, the better prepared you are. Research all aspects of the contract, especially terms that you do not understand. Don’t just assume it’s “typical contract language.” Understand every clause included within the contract and understand the industry that you are entering into – especially if this is your first contract within the business. For example, influencers entering into contracts for brand marketing should have knowledge of industry practices – what is expected of you as an influencer? What are typical requirements of an influencer within this industry? What can’t you do? What is the average compensation received for the services you are providing? The same goes for brands looking for influencers as brand ambassadors. RESEARCH! RESEARCH! RESEARCH!
6. Make sure you are fully protected! - I know you may be super excited [-or maybe not-] to enter into this contract, but please, please, pleaseeee make sure that you are fully protected within all four corners of the contract. Basically, think of Murphy’s Law – all things that could go wrong, will go wrong – so if all things went wrong during the life of the agreement, would your assets be fully protected? Or would you lose out? Would you owe money? Could you be sued? If you think of a scenario that may have a negative effect on you or your business, then you may want to go back to the drawing board & re-negotiate that contract! [& if you really wanna be smart about this – contact an attorney].
7. Know your strategy – what is your negotiating style?
Will you have a strong-arm approach, or will you approach negotiations with a collaborative attitude? In knowing your strategy and negotiating style, you should get a feel of the opposing party’s negotiating style but stay true to yourself! It may not be in your favor to have an “all or nothing” approach if the other party is going for a softer approach…this may push them away. Also, don’t try to imitate what you see on T.V. by approaching negotiations with a stern attitude – especially if that is not your personality style – this may leave you without a contract to negotiate.
But also – don’t be weak + eager… of course this may be a partnership or opportunity that you are really looking forward to, but don’t let the other party push you over. Ask for exactly what you want, but respectfully. Put it all out on the table + see how the other party reacts + go from there. Be confident + negotiate with purpose. You got this!!
8. Know your worth. Take this as a professional + personal tip! Always know your worth when negotiating – even if negotiating a salary! Don’t underestimate yourself and don’t lowball yourself. In fact, as many of you may know, a common style of negotiating is to price yourself high. Ask for more than you actually expect. It’s a win|win – you may get exactly what you expect, or you may in fact get more than what you expect!
9. Stay focused! Don’t lose focus on your contract objective. Prioritize what is important to you in the contract. It’s easy to get tied up in the minor details, but if those details are not really important to you, don’t waste time on it. Remember, negotiating is about give + take, there may be some things you give into & there may be some things that the other party gives into. Don’t let your ego get in the way. Also, time is of the essence. The longer you spend on the minor details, the longer it will take for you to reach a final agreement. So, stay focused, remember your objective and spend time on what really matters to you and protects you of course.
10. Lastly, don’t be afraid to walk away. Obviously, when going into negotiations the goal is to achieve a final agreement. However, if your end goal is not being met and you find yourself arguing over every minor detail + every major issue, then maybe this opportunity is not for you - & that’s okay. At some point both parties may come to an amicable agreement that this agreement is not for them. So, if you find yourself questioning if this agreement is right for you and you continue to hit a brick wall on every issue that comes up, save yourself the time and energy, leave on a professional note [before things get nasty – because they can] & maybe suggest tabling the matter for a future date.
& if all else fails - CONTACT AN ATTORNEY! If you’re entering into a contract that is very detailed and involves a lot of assets and/or liability, you may want to hire an attorney to review and/or negotiate your contract. Even more so if the contract is very industry-specific, you’ll need an attorney that is knowledgeable in that area & understands industry practices. However, the Brooklyn in me will be real with you - you don’t need an attorney for every single contract that you enter into or negotiate - after all, we enter into contracts all the time. So, if you don’t plan on hiring an attorney, be sure to follow these tips to prepare + protect yourself during negotiations.
Signed,
Cassie T., ESQ
