DISCLAIMER: This post provides tips for effective contract negotiations. It is not legal advice, and I am not your attorney. If you require information or advice applied to your unique situation, please make an appointment to discuss it with an experienced attorney of your choosing.
As a former minor league hockey agent and minor league sports executive, I negotiated player contracts in leagues with salary caps. I also haggled with some of the most powerful companies in the world over sponsorship packages. In my 20 years of private practice as an employment attorney and mediator, I have helped countless business owners reach mutually beneficial agreements with employees, strategic partners, and the State of New York.
One of the most important things I have learned is that the most crucial skill is not dominating the conversation. It is listening.
This may seem counterintuitive, but effective listening is essential to a successful negotiation. You need to listen for what isn’t being said and ask the questions that reveal it. In almost every contract dispute I have litigated or mediated, it was the concern that wasn’t shared or the expectation that wasn’t confirmed that lead to the breach.
Have the Uncomfortable Conversations
When you listen to the other party, you learn what matters to them. Whether they are sharing this directly or indirectly, it will benefit you to know for certain if you are building a mutually beneficial partnership or a relationship built on deception and control.
Asking questions and confirming what might seem obvious allows you to:
- Build rapport
- Identify common ground
- Find creative solutions that meet the needs of everyone involved
The best agreements aren’t rushed or standard. They are based on thorough review of the common pitfalls and how the parties will protect the relationship from them.
How to Listen Effectively
Here are a few tips for listening effectively during a negotiation:
- Pay attention to body language. Non-verbal cues can tell you a lot about what the other party is thinking and feeling.
- Ask questions. The more you know about the other party’s needs, the better equipped you will be to find a solution that works for everyone.
- Be respectful. Even if you disagree with the other party, it is important to treat them with respect. This will help to create a positive atmosphere and make it more likely that you will reach an agreement.
Listening is not always easy, but it is essential for successful negotiation. Remember, you’re negotiating terms of a relationship. Don’t start on the wrong foot. Do your best to set everyone up to win.
Additional Tips for Effective Negotiation
- Do your research. The more you know about the other party and their interests, the better prepared you will be to offer a range of solutions when conflicts arise.
- Be flexible. Don’t be afraid to compromise on provisions that don’t matter much to you. But also make sure you are clear which provisions those are and the consequences of waiving or modifying them.
- Be positive. You are in a more powerful position when you see yourself and the other party as equals. There is something each of you wants from the other. Otherwise, you wouldn’t be entering a negotiation.
- Be prepared to walk away. If you are not happy with the terms of the agreement, be willing to walk away. There are probably many other businesses or people who can meet your needs. Keep looking for the ones willing to form a mutually beneficial relationship.
By following these tips, you can improve your negotiation skills and increase your chances of success.