The smallest mistake can kill an otherwise productive contract negotiation process. Avoid these contract negotiation mistakes so that you and your vendor will come to an agreement that will benefit both parties.
1. Thinking The Yard is Fenced InDon't assume that only a certain subset of resources or conditions can be negotiated. The sky is the limit and finding creative and original alternatives that can benefit both parties will result in a better negotiated contract. Do not propose ridiculous or insulting alternatives that will destroy your sincerity and integrity.
2. Failure to Study Your OpponentToo many people approach contract negotiation process with the "It's all about me!" mentality. They fail to research the vendor that they will be negotiating with. They don’t understand the vendor's market and what other influences control their environment. The larger the contract, the more time you should spend on this.
3. Too AggressiveYou need to be certain that your company's interests are at the forefront of your priorities but at the same time you need to be mindful and sensitive regarding the person representing the vendor. Going "on the attack" will only succeed in raising his/her defensive mechanisms and negotiations will turn out to be fruitless.
4. It's All About PriceOf course nobody wants to pay too much for their goods and services, but there is a lot more on the table than just money. Look for alternatives that are high on your priority list and low on the vendors. Then you both win.
5. Jumping Too QuickNo matter how low the opening price is, offer lower or ask for something more. If you jump too quickly at the first offer, the vendor will feel like they made a stupid mistake. You want the vendor to leave the negotiation table feeling good.
6. Don't GloatWhen you do end up striking a fantastic deal in your favor, don't embarrass the vendor by saying something that will give you an ego-trip at his/her expense. Not only is this unprofessional, but the vendor may then look for loop-holes in the contract to regain some money and pride.
7. Terminology Not Defined or UnderstoodDon't assume that everyone who will read the contract will understand every technical term or complicated provision. Insist that every area of the contract that has the possibility of being misunderstood is clearly defined.
8. Inconsistencies Within the ContractLook for inconsistencies within the contract that can come back to haunt you in some form of arbitration. If necessary, have a third party review the contract in order to uncover any inconsistencies.
9. Concern in One Area Will be Overridden by Another AreaDo not assume that a perceived weakness or apprehension in one area of the contract can be compensated by strength in another area. Be specific and direct in all areas. Once the contract is contested in a court of law, all control is removed from your hands.
10. Avoid RedundanciesStating the same thing twice in different section of the contract will not reinforce their value. In most instances lawyers and the courts will come up with a reason to differentiate and justify both areas; usually with an interpretation that neither party anticipated.