Contract Negotiation and Writing Tips

Individuals and companies negotiate and enter into contracts fairly frequently in the course of business. Some business agreements may be simple enough for the typical person to draft, and may just be a verbal agreement and a handshake, while others may require the help of a skilled contract attorney.

In either case, the ideal end result is confidence that you have negotiated the best terms for your business and created a well-drafted agreement that will avoid any dispute or potential litigation. Below, you'll find tips on negotiating and writing a sound business contract.

Negotiating Tips

Certain fundamental strategies will assist you in the day-to-day negotiation that all businesspersons perform, in contracts and other business transactions. Remember, those with whom your business is negotiating also will be working hard to leverage the deal in their favor. The following are a few suggestions to get you started on the road to effective negotiation tactics:

• You should always have clear objectives. It helps to make a list of goals before meeting the other party.
• It is important to go to a negotiation having done your research. Know relevant law, facts, and figures.
• Consider what you really need to get from the other party, and also decide in what areas you are willing to compromise.
• Build trust with the other party.  Trust will aid communication.
• You may want to have a first draft of an agreement written before meeting with the other party.
• Try to keep the discussion ordered when meeting with the other party.  Make a checklist of topics that should be reached during the negotiation.
• Listen to the other party and their concerns.

Contract Drafting Tips

It is helpful to understand the basics of contract drafting even if you rarely draft your own contracts. A basic understanding can add to your confidence in all types of business writing, and will also aid when reviewing and interpreting the contracts in which you are a party. Consider the following tips for drafting a contract:

• An effective contract should always be clear, specific, and focused.
• Sentences should be short to avoid unnecessary complexity and ambiguity.
• You may want to look at sample agreements prior to drafting your own.
• Make sure all party names are accurate.  Include their business titles if applicable.
• A contract should be consistent in its tone, grammar, word usage, and abbreviations.
• Outlining the contract can aid clarity and allow for quick reference to certain clauses.
• Define important terms.
• Anticipate litigation by including sections regarding venue, choice of law, and attorney fees.
• All parties should sign the contract, including business titles if applicable.
• Pages should be numbered. Avoid the appearance that pages could have been added after the agreement was signed.
• As with any business writing, proofread very carefully.

Talk to a Lawyer First Before Negotiating a Contract

Since contracts are legally binding and don't always go according to plan, it makes sense to negotiate shrewdly, understand all of the terms in a contract, and make sure you're prepared should the agreement go south. Consider speaking with a business and commercial law attorney before negotiating or signing a contract.

See FindLaw's Drafting Contracts and Contract Law sections for more articles and resources.