Contract negotiation

Jacques Folon www.folon.com

Partner Edge Consulting

Maître de conférences Université de Liège Professeur ICHEC Brussels Management School Professeur invité Université de Lorraine (Metz) ESC Rennes

Law and contract negotiation Contract negotiation

Table of content1. Introduction to contract negotiation

2. Contract negotiation skills

3. Basic principles and myths

4. Phases and main types of contracts and negotiations

5. Context & communication

6. Teams & resources

7. Pricing and KPI’s

8. Conflicts in contract negotiation

9. Contract negotiation process

10.Emotional intelligence

11.telephone & virtual contract negotiation

12.Contract negotiation best practices

13.The seven habits of bad negotiators

14.Closure & evaluation

15.After contract’s signature

CONTRACTS ARE IMPORTANT

What is contract negotiation?

Negotiation is the act of two parties discussing the pros and cons of a particular contract at hand in an attempt to

arrive at an agreement.

The Market

The Market Swings Both Ways How to adjust your planning to work within the current environment •“Sellers’” markets versus “Buyers’” markets •Where the market is today •Be flexible •Explore new destinations

Negotiation skills are important

Negotiation skills

What are the 5 most important negotiation skills?

PERMANENT IMPROVEMENT

Basic principles of contract negotiation

Myth n°1Negotiation is only for the pros.

WRONG.

Negotiation is how we learn to use our skills and qualifications to their fullest extent.

As we are all natural sales people (we sell ourselves and our services daily!), we must learn to lay out our cards for a contractual agreement and play our hand.

Myth N°2

Negotiation is an easy way to lose a contract.

If done properly, one should never worry about losing a potential contract with a client.

As long as a middle ground is met, both parties should be happy to an extent.

If you try to sway everything to your favor, and it is not a win-win for both parties, you can potentially lose the opportunity.

MYTH N°3I’m not good enough to negotiate.

Absolutely wrong.

We all have certain talents and skills that make us stand out in the marketplace.

Do your research, take time to figure out what you can over deliver in, and always use it as your secret weapon in

negotiating with a client. If you can surprise them and make their lives easier

somehow, do just that.

Phases of contract negotiation

Lease or buy ?

NEGOTIATION CONTEXT

What agenda should be followed? Where will the nego7a7on be held? How long will the nego7a7on take? What agents, observers or advisers will be involved in the nego7a7on? What might be done if nego7a7on fails? How will we keep track of what is agreed? How do we know whether we have a good agreement?

THE COMMUNICATION

QUESTIONS DURING CONTRACT NEGOTIATION

ADVANTAGE OF WORKING IN TEAMS

RESOURCESPersonnel. Sufficient staff, with the right experience and skills. Finance. There must be an adequate budget. Time. Sufficient and appropriate 7me must be set aside. InformaHon. Informa7on – about the supplier, the market,

environmental factors, bargaining posi7ons and so on – is a key resource for nego7a7on. Space and faciliHes, if the nego7a7on is to be conducted via a face-‐

to-‐face mee7ng in a chosen venue. InformaHon and communicaHon technology (ICT) resources, if the

nego7a7on is to be conducted via ‘virtual’ mee7ngs, using telephone conference calls, tele-‐conferencing or web-‐conferencing

Necessity of supplier’s performance measurement

Pricing range of negotiation

Conflict in negotiation

When a conflict is present, it makes a negotiation seem more necessary than when there is not.

Conflict typically leads to less of something for both parties.

For example, less money is to be made if the deal is to move forward with no negotiation.

Question if you are struggle in a conflict

1) Are all the parties interested in negotiating?2) If not, why is one or more of the parties reluctant?3) Can anything be done to make negotiation more attractive to them?4) Do the parties all know their alternatives to a negotiated settlement?5) Do they feel those alternatives are good?6) Do the parties have a legitimate leader or representative who could effectively negotiate for them? 7) Is a forum available for negotiations?8) Is a credible mediator available to assist in the negotiations?9) Do the parties agree on the credibility of this mediator?

History of a contract negotiation

Contract negotiation process











11.Telephone & virtual contract negotiation





EVALUATION

CONTRACT SIGNED BUT…

CONTINUOUS PROCESS

CreditsContract Negotiations: Prepared and Fair are Effective in Any Market http://fr.slideshare.net/KristiCaseySanders/contract-negotiations-prepared-and-fair-are-effective-in-any-market?qid=0ca75703-dde2-4bbf-a3bb-8c3f0615918d&v=default&b=&from_search=2

Contract negotiation, A.Abouhana,http://fr.slideshare.net/AdelAbouhana/contract-negotiations-40072105?qid=0ca75703-dde2-4bbf-a3bb-8c3f0615918d&v=default&b=&from_search=5

The ultimate negotiation guide,http://fr.slideshare.net/coquitoday/the-ultimate-contract-negotiation-guide?qid=0ca75703-dde2-4bbf-a3bb-8c3f0615918d&v=default&b=&from_search=7

Contract negotiation, K. Sanders,http://fr.slideshare.net/KristiCaseySanders/contract-negotiations-beyond-the-basics?qid=0ca75703-dde2-4bbf-a3bb-8c3f0615918d&v=default&b=&from_search=8

Negotiating and Contracting in Procurement and Supply, CIPS,http://fr.slideshare.net/timkumwenda/negotions-and-contracting?qid=0ca75703-dde2-4bbf-a3bb-8c3f0615918d&v=qf1&b=&from_search=23

Elizalde, D., how to successfully negotiate your contracts,http://fr.slideshare.net/daniel_elizalde/how-to-successfully-negotiate-your-project-contracts-daniel-elizalde?qid=0ca75703-dde2-4bbf-a3bb-8c3f0615918d&v=qf1&b=&from_search=33

Steger, M., The seven habits of highly ineffective contract negotiators,http://fr.slideshare.net/KeglerBrown/steger-seven-habits?qid=0ca75703-dde2-4bbf-a3bb-8c3f0615918d&v=qf1&b=&from_search=38

Contract negotiation

Education

Transcript of Contract negotiation