Negotiators Need To Know How Much Of A Contract Needs To Be Enforced

by drjim on February 8, 2013

Do you really need to keep track of every detail in a contract?

Do you really need to keep track of every detail in a contract?
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Can I tell you something? Can you keep a secret? Contacts are boring. Not only are they that, but generally speaking they are both long and boring. That’s why it can be very easy for negotiators to not pay a great deal of attention to exactly what is in a contact and it turns out doing so could be a serious mistake…!

Why Reading A Contact Carefully Is Important

I’m busy. You’re busy. Isn’t making sure that the other side lives up to their part of a contact really the job of all of the lawyers that both sides of the table employ? Hmm, generally this isn’t the case. The lawyers will only get involved when somebody notices that a part of the contract is not being fulfilled. What this means is that even after the negotiations are over, you’ve still got work to do.

When a negotiation has been concluded and all of the negotiation styles and negotiating techniques have been put away, the next step is to draw up a contact. You would think that putting everything down in black and white and then giving everyone (including the lawyers) a chance to take a look at it would be the end of the discussion. However, often it is not.

Within every contract there are many clauses. It can be very easy to overlook the fact that each and every clause has to be executed by one or both sides at some point in time. If that doesn’t happen for one clause, what makes you think that it will happen for any of the clauses?

The Story Of The Birthday Card

Ultimately what a negotiator wants to do is to make sure that the other side of the table understands that they need to live up to each and every clause that is in the contract. In order to do this, you often have to send a very clear message.

One of my negotiating clients had a very clever way of doing this. He called it his “birthday card technique”. Here’s what he did. When he was working out a contact with the other side of the table, he’d work a clause into the contact that said that they had to send him both the payment that they had promised and a birthday card addressed to him before he would deliver the goods that they wanted to buy.

When the other side saw this clause, they’d ask to have it removed, my client would insist and everyone would shrug and allow it to go into the contact. Inevitably what would happen then would be that the other side would end up delivering their money and would forget about sending the birthday card.

My friend would then pick up the phone and call the other party. He would point out that the contract that they had signed required them to send him a birthday card and he would not be providing them with the goods that they needed until they took care of this requirement.

At this point in time, nobody was laughing anymore. Later that day FedEx would show up at my client’s office with a very nice birthday card. He would then throw the card away and deliver the goods that they were waiting on.

The purpose of this was for my client to send a very clear message to the other side of the table: you need to perform everything that you agreed to do. After this incident, they got the message and there were no more problems.

What All Of This Means For You

When the principled negotiation is over, the contact gets written and then agreed to. You would think that at this point the negotiator’s job would be all done. However, you still have a responsibility to make sure that everything that you negotiated actually gets done.

Because of the number of clauses that a typical contact can contain, it can be very easy for the other side to overlook more or more of the things that they agreed to do. Including a clause in the contract that you monitor and insist that they complete, no matter how silly it is, will send a clear signal to the other side of the table that you really mean for them to live up to the agreement.

A contract that does not get fully executed is of no value to anyone. What you want to do is to get a reputation as a negotiator who can strike a good deal and who makes sure that that deal gets implemented.

– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Negotiating Skills™

Question For You: Instead of asking for a birthday card to be sent to you, what else could you do to communicate how important it is to execute every clause in a contact?

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What We’ll Be Talking About Next Time

Have you ever been involved in a negotiation and you could start to see the end of the negotiation show up? You’re tired, and you just want this one to be over. It can be awful easy to start to make a run for the finish line. However, professional sales negotiators know that this is when the most serious mistakes can be made…

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