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Home   >Best Practices

How to Negotiate a Contract

September 28, 2023

Navigating the complexities of contract negotiation requires skill, preparation, and a keen eye for interpersonal dynamics.

Whether you’re involved with a deal of the size of Vodafone and Mannesmann or negotiating terms for a freelance gig, the principles remain consistent. Below, we dissect the art and strategy of contract negotiation into three critical phases:

  • Before you begin
  • While you’re negotiating
  • After you’re done

Before you begin

1. Comprehensive Research is Key

How well do you know the organization, company, or individual you’re dealing with?  What’s their history? Reputation? Financial standing? Understanding your counterparty gives you an edge. Knowledge equals confidence!

2. Understand Your Worth

Have a crystal clear understanding of what you bring to the table. It isn’t just about the money. Skills, expertise, networks, or unique selling points – list them. What does the other party find valuable? When you know your worth and why it's valuable to the other side, you can position yourself from a place of strength.  Understanding your value is important for any negotiation, but especially job negotiations.

3. Set Clear Goals

Define your objectives. Are you seeking a particular payment term? Specific working conditions? Know what you want, set your boundaries, and also determine areas where you can flex.

4. Role-play Scenarios

Anticipate potential challenges. Role-play negotiation scenarios with a trusted colleague. This rehearsal sharpens your responses and prepares you for real-time negotiations.

5. Choose a tool to support your negotiation

Throughout the negotiation, documents and terms will be exchanged between you and your counterparty. While email is ubiquitous, it comes with well-understood problems:

  • Security: In addition to threats such as hacking or phishing, email is prone to inadvertent data disclosures (sending the wrong files, emailing the wrong people, or both).  
  • Poor Organization: As responses accumulate and threads multiply,  email becomes convoluted, making it hard to find messages, track changes, and previous discussions.
  • Versioning: It’s vital to understand which version of the documents are under review. With email version control becomes challenging when multiple document versions are circulated. Don’t make the mistake of referencing or making decisions based on outdated information!
Top tools to support your contract negotiations


Email is, by far,  the most widely used tool to support contract negotiations. Both parties send contract revisions as attachments. While email is ubiquitous, as we mentioned above, its deficiencies create many issues such as security/confidentiality,  lack of structure (whose turn is it to work?), and version control (which is the last version?).

Collaborative document editing

Using a collaborative document editing tool (Google Docs, Microsoft 365) simplifies how two parties work on the same document. Nevertheless, most legal professionals refuse to use these tools because they cause issues in the flow of a contract negotiation. In a Google Doc, both parties work at the same time, so there is no turn-by-turn collaboration structure. And, the ability to watch edits in real-time and see every single change ever made can reveal a bit too much information about one’s negotiating strategy.  Humorously, “Let’s Start a Google Doc” has become the five most dreaded words in the office setting of many professionals.

Contract Life Cycle Management (CLM) software

Most CLM software ( Juro,  IronClad, etc.) is focused on managing an organization's contracts from initiation through execution, performance, and renewal/expiry.  These tools often include redlining features that could be used by parties to review and edit a contract (i.e., the owner of the CLM solution and their counterparty).  While this makes things a lot easier for the owner of the CLM solution, it forces both parties to use a proprietary tool to review, redline, and edit contracts.  In most cases, lawyers are using Microsoft Word to edit all their contracts and don’t want to switch between specific tools.


brings a new approach to collaboration on documents. Each party keeps using its existing tools to edit contracts but shares versions using TakeTurns rather than email. TakeTurns works turn by turn, so participants always know whose turn it is to work. All exchanged versions of a contract are automatically tracked, so there’s no confusion.

While You're Negotiating

1. Build Genuine Rapport

Begin with small talk. Ask about their day, comment on the weather, or discuss a recent industry event. Building rapport, though seemingly trivial, is a kind of confidence-building measure that lays the foundation for mutual trust.  It’s worth remembering that technology can amplify or attenuate rapport depending on the level of pre-existing trust between the parties.  Email can be a source of misunderstanding because context is often lost.      

2. Listen More, Talk Less, and Document

Let them speak. Active listening reveals vital clues about their priorities, concerns, and areas in which they might be flexible. Make sure you map their issues and interests to what you bring to the table and your issues and interests.  In addition, you can document your shared understanding in a letter of intent, memorandum of understanding, or go-live plan.   These initial consensus documents can serve as the foundation of your contract.  

3. Use the "Silent Treatment

Once you've presented a term or proposal, wait. Silence creates a subtle pressure for the other party to respond, allowing you to gauge their reactions.

4. Be Clear, Be Direct

Avoid jargon. State your terms in plain language. This ensures all parties are on the same page and reduces the chances of misunderstandings.

5. Focus on Mutual Benefits

Don’t pitch your proposal as a one-sided affair. Emphasize how the terms can benefit both parties. Mutual advantage is a powerful persuader.

6. Handle Objections Gracefully

If they push back on a term, don’t get defensive. Instead, ask open-ended questions to understand their concerns better. Often, this leads to finding a middle ground.

7. Document Every Detail in a Contract

After reaching a verbal agreement, ensure every point gets documented. A well-drafted contract removes ambiguities and serves as a reference point for both parties.  The tool or technology you chose to support your contract negotiation plays a critical role. It can help you manage the cadence of contract reviews between you and your counterparty, manage versions of documents, and support the inevitable Q&A between the parties. (And it’s a reason to look beyond email).

TakeTurns improves contract negotiation it simplifies how you exchange contract documents with opposing counsel

After you’re done

1. Seek a Legal Review

Always get the drafted contract reviewed by a legal expert. They’ll spot potential loopholes or inconsistencies that you might have overlooked.  

2. Stay Accessible

After wrapping up the negotiation, remain available for any follow-up questions or clarifications. Open channels of communication show professionalism and commitment.

3. Reflect and Learn

Once the deal is sealed, take a moment to reflect. What went well? Where did you face the most resistance? Learning from each negotiation helps you hone your skills for the next.

4. Nurture the Relationship

The end of a negotiation doesn’t mean the end of a relationship. Periodic check-ins or simple thank-you notes can foster goodwill. Remember, today's negotiation partner can be tomorrow's business ally.

6. Wrap-Up and Archive

Once you've successfully concluded the negotiation (or not), the process doesn’t end at signatures. It's vital to consolidate and securely store all documents, files, their versions, and correspondence related to the negotiation. Proper archiving serves multiple purposes:

  • Point of Reference: Should any disagreements or uncertainties arise in the future, having a well-maintained archive offers an invaluable reference, ensuring both parties remain aligned with the originally agreed terms.
  • Audits and Compliance: In sectors where regulatory compliance is paramount, maintaining a clear record of negotiations can be essential for audits or internal reviews.
  • Lessons Learned: Reviewing archived negotiations can provide insights for future dealings, helping teams understand what worked and where improvements might be made.
  • Data Protection: Ensure all sensitive information is stored securely, whether in encrypted digital formats or in locked physical storage, to prevent unauthorized access.
  • Meeting your regulatory obligations: In certain jurisdictions, there are rules (GDPR, CCPA) around how and for how long personally Identifiable Information (PII) can be stored on your platform.   (In some jurisdictions, the fines can be quite large!)  It’s important to ensure that the tool/technology you chose to support your contract negotiation process supports your strategy for remaining compliant with the law.  

In essence, the meticulous task of wrapping up and archiving isn't merely administrative—it's a proactive measure to safeguard the integrity of the negotiation's outcomes and to equip oneself for future engagement.

In Conclusion

Contract negotiation, while challenging, isn’t an insurmountable task. By breaking down the process into distinct phases and understanding the nuances of each, you set yourself up for success. Equip yourself with knowledge, approach each discussion with clarity, and always keep the bigger picture in mind. Here's to mastering the art of negotiation and forging robust, mutually beneficial contracts!



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