Having an agreement in place is basic business practice – but having an agreement and reaching an agreement are two very different things.
Too often a business will sign a contract with a supplier with no details added except the company name. The parties may or may not have actually agreed on what the contract covers – deliverables and obligations are either missing or minimal – and assume it will protect them if the deal goes sour.
The bottom of the cliff
The facets of a contract that tend to get the most discussion and negotiation are the negative ones. A customer focuses on indemnity, liability, and warranties, and feels satisfied when they have a contract that covers them if something bad happens. Rather than use the agreement to prevent problems, its entire focus is on who will be held responsible for them.
But without full deliverables spelled out in the agreement, the protection it offers can be subverted. Proving a supplier has not delivered on their promises is vastly more difficult if those promises are not in the contract, and knowing who is liable is only useful if you also know what they are liable for.
What needs to be agreed on?
Proactively using the negotiation period to ensure that expectations for the project are aligned between supplier and customer saves time and trouble later on. Typically, an agreement needs to spell out:
These need to be fully agreed upon between both parties to have an agreement which is useful. For aspects that are not known at the outset, the agreement should outline the process and timing for reaching agreement.
The big question – are all your agreements profitable and successful?
They should be, right? Few businesses go into an agreement that they know will be unprofitable or unsuccessful. But not all agreements enable these basic outcomes to be met – and the reasons behind that could have been dealt with at the beginning.
The complexity of the project does not matter – no project is too complex to be properly negotiated and fully agreed upon. Investing the time upfront can save huge amounts of time, money, and frustration later on.
IT Contract Templates provides the tools to create successful contracts over which both parties actually agree. Bundles include negotiation tools and checklists to ensure that matters which should be addressed are fully covered. ITC templates also modular design which allows clauses to be easily added or removed during negotiation. By using an ITC template any business can go into a contract negotiation prepared to get agreement between the parties, not just to sign one.
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