The Contract Negotiation Process

The contract negotiation process is important because it involves creating relationships in business. It is evaluating and coming to terms with every party’s views and it comprises of the common agreement through a particular sequence. The contract negotiation process is a matter of negotiation, and each individual involved tries to effectively negotiate their way to the terms that are in favor of  their interests. They must engage communication among both parties with various essential contract factors, including the benefits (revenues) and challenges (risks).

            In this topic, negotiable contracts can be identified in different fields. For example, the fields that involve specific processes in contract negotiation include employment contracts, real estate leases, financial contracts, and manufacturer warranties. According to Roberts (2020), negotiation is an important aspect of any form of transaction because once the process comes to the final stage, it legally bounds all the parties concerned. However, for complete contract negotiation, the individuals involved must go through three fundamental steps. The three steps include:

            Step 1: The most important step in the contract negotiation process is preparation. One must have a knowledge about the contract before engaging in one (Roberts, 2020). For example, when engaging in a transaction deal like supply contract, one must prepare about five major issues, such as identifying the issues one needs to negotiate about, have viable information about the contract, one must classify the contract to identify their limits, prepare for the meeting and get ready to negotiate.

            Step 2: The second step of contract negotiation is always having a round table meeting, also known as “the negotiating meeting” with all parties involved. For example, as a supplier, before meeting for negotiation, one needs proper preparation in order to talk about the details of the contract an come into agreement about everything.

            Step 3: Analyze and summarize all the points discussed among both parties, such as payment details, contract volume, when the contract will commence  and the pricing for the contract.  

In conclusion, the contract negotiation process is important for maintaining issues of integrity and transparency. A good negotiating process will lead to long lasting relationships, which may lead to a positive outcome at the final stages of the contract.

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References

Roberts, L. W. (2020). How to Evaluate a Letter of Offer or Contract. In Roberts Academic Medicine Handbook (pp. 45-53). Springer, Cham.