New year's resolution: land a whale of a contract

Author
Harry Hamilton Jennings
Managing Director | Hamilton Law Scientific
23rd December 2021

We're not sure that bringing in big deals (or whaling) is entirely within the spirit of the festive season, but perhaps these simple points will help you to negotiate a strategic commercial contract with a big prospective customer, spreading goodwill to all involved.

Where do we start?

Big businesses will have developed their own template contracts, which they will probably want to start from. You will then need to make it suitable and acceptable for your business (which is often easier said than done). If you start from your own template, they will most likely compare it to theirs and add in the things that they think are missing from yours, which can get very messy (like your house was by mid-morning on Christmas day). Consider which way gets you to a reasonable starting point quickest, and which party should be the one putting cost and effort into legal support at this stage. The answer depends on your bargaining position, and the state of the relevant template, but don't let this sensitive opening issue delay or set an adversarial path for the negotiation.

Where do we finish?

If the deal involves parties from different countries, aim to agree at an early stage the choice of law to govern the contract and the manner of resolving disputes. It can be awkward to talk in detail at the start about what happens if things go wrong, but it is a great topic to sort out and take off the table, avoiding a more difficult discussion at the end of the negotiation. It may also influence the negotiation of other points and your choice of legal support.

In accordance with our policy

It is a reality of large businesses that they have policies, procedures, corporate authority matrices, escalation charts, layers upon layers of management, multiple teams collaborating on aspects of the same deal, and plenty of capacity for bureaucracy. It's not always the case, but accept this as the general rule. And when you get the inevitable statement that your request is not permitted by their policy, try having an amicable discussion about their policy (you might find that going through escalations under the policy is not as painful as expected). Work with them, and help them get through their process. Be clear about the lines that you want them to cross in order to do the deal, and make sure you are prepared to justify why they should do it for you.

Putting together the deal

As the negotiations progress, put together a table summarising the key elements of the contract. This will be a mixture of commercial and legal points. If the deal is finely balanced in any way, take care not to agree things in sequence with an adverse effect on the overall package. It's OK to agree things in principle or subject to other elements of the deal. Consider offering a package of requests and concessions based on the entire negotiation. Ask your lawyer for different approaches to protecting a particular interest so that you don't get stuck too long in circular argument.

In the spirit of the season and with the optimism of a fresh new year, adopt these approaches with a smile on your face and think of the whole task as a team effort even if you might have a few disagreements (you know, like Christmas).

Happy new year from,

Hamilton Law Scientific

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