Discover step-by-step techniques for avoiding common business negotiation pitfalls when you download a copy of the FREE special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School.


contract negotiation

What is Contract Negotiation?

A contract negotiation can be the source of strength in a relationship or a pivot upon which negotiated agreements fall apart

It can be tempting to rush through a contract negotiation process, file the document away quickly, and roll up your sleeves. But the best negotiators pay attention to the details.

When business negotiators don’t devote enough attention to ensuring that a contract negotiation leads to a sound long-term deal, the unfortunately common outcomes are broken contracts, damaged relationships, and lawsuits.

This may be especially true in labor relations where there are rarely clear cut or mutually agreed upon notions of what a fair salary and benefits package would be. Nor is a labor contract negotiation usually limited to questions of compensation. Working conditions, safety concerns or questions about worker rights, regularly surface and must be resolved.

Too often, we approach contract negotiation with a narrow mindset, assuming we will be fighting with our counterpart to grab as much as we can. Rather than looking for ways to expand the pie, we focus on carving it up. Rather than capitalizing on our different preferences, we accept impasse. By contrast, when parties can trade on their preferences across different issues, they reduce the need to haggle over price and percentages.

Don’t make another bad deal. In business, the stakes are too high and the consequences are too severe to allow a bad deal to pass your desk.

To find out more and discover how to boost your power at the bargaining table, download a complimentary copy of our special report, Business Negotiation Strategies: How to Negotiate Better Business Deals, from the Program on Negotiation at Harvard Law School right now!

We will send you a download link to your copy of the report and notify you by email when we post new business negotiation advice and information on how to improve your dealmaking skills to our website.

 

Negotiations over the terms and conditions of a binding legal agreement between two or more parties.

The following items are tagged contract negotiation:

What is an Arbitration Agreement?

Posted by & filed under Conflict Resolution.

If you have ever owned a cell phone or been issued a credit card, odds are you’ve signed an arbitration agreement. You also may have signed an arbitration agreement when you started your current job or a past one, whether you remember doing so or not. … Read More 

Negotiation Research Examines Ethics in Negotiating

Posted by & filed under Negotiation Skills.

Lack of transparency regarding negotiations between hospitals and the insurers known as preferred provider organizations, or PPOs, is a key contributor to spiraling health-care costs in the United States, back in a 2013 article in the New York Times. This topic has many questioning ethics in negotiating within the healthcare industry. The problem starts with the … Read More 

Negotiating the Healthcare Industry

Posted by & filed under Uncategorized.

Teach Your Students to Negotiate One of the Most Critical Global Industries With the emergence of a devastating global pandemic, the acute importance of the healthcare industry to community welfare has become even more apparent. Healthcare is one of the biggest economies in the world, with billions of dollars spent on treatments and associated research. There … Read More 

Contract Renegotiation in a Time of Crisis

Posted by & filed under Business Negotiations.

The COVID-19 pandemic has left many of us negotiating circumstances we never envisioned just months ago, from health crises to lost jobs to plummeting sales. Businesses of all sizes, in particular, are faced with the difficult task of contract renegotiation as a result of parties’ inability to meet current deal terms. Unfortunately, contract renegotiation is much … Read More 

How to Use MESOs in Business Negotiations

Posted by & filed under Business Negotiations.

It’s not uncommon in business negotiations to find yourself on the brink of impasse. You and your counterpart have exchanged a series of offers and counteroffers, and you’ve met somewhere close to the middle—but not close enough. With each side firmly rooted in its position, there may seem to be no way forward. … Read More 

Digitally Enhanced Simulation Packages – Try for Free!

Posted by & filed under Uncategorized.

*Right now, try online, digitally enhanced simulation packages for free on the iDecisionGames platform:   Worried about how you’ll run your class online? Right now iDecisionGames is waiving platform usage fees for any professor new to the platform who is impacted by COVID-19. In-depth Teaching Materials with Real Time Data Analytics Designed to Enhance Teaching Negotiation  New from the … Read More 

Teach Your Students Cross-Cultural Negotiation

Posted by & filed under Uncategorized.

As our world grows increasingly interconnected, we are more likely to find ourselves negotiating in a cross-cultural context. The diverse makeup of many societies and global nature of business today make cross-cultural negotiation a regular part of life. Also, unfortunately, many major disputes in need of resolution cross ethnic and cultural lines. Furthermore, it is important … Read More 

Labor Relations: Negotiating Collective Bargaining Agreements

Posted by & filed under Uncategorized.

Contract bargaining in labor relations is one of the most complex areas of negotiation and dispute resolution. There are rarely clear cut or mutually agreed upon notions of what a fair salary and benefits package would be, so employers and workers, either individually or collectively, often find themselves at odds. Furthermore, contract bargaining in a … Read More 

The Wired Negotiator: Using Technology in Negotiation

Posted by & filed under Teaching Negotiation.

Everyone negotiates every day. How we negotiate is changing dramatically due to the use of various technological tools. People need not fear this change. Rather, they should understand the different technology at their disposal, grasp the pros and cons, and determine how to select the best medium to suit their needs, negotiation style, and approach. … Read More 

Bargaining at a Fever Pitch

Posted by & filed under Leadership Skills.

Have you ever won an auction only to realize later that you overbid for the prize? In competitive bidding situations, it’s easy to get carried away in the heat of the moment and overpay. The Boston Red Sox 2006 procurement of Japanese pitching phenomenon Daisuke “Dice-K” Matsuzaka offers a lesson in keeping cool in these … Read More 

Conflict Negotiation Strategies for Business Negotiators

Posted by & filed under Conflict Resolution.

When closing a deal, new business partners are typically optimistic about the path ahead. But somewhere down the line, conflict is almost inevitable. One party may miss a deadline. The two sides may interpret contract terms differently. Changing economic conditions may make it difficult for one side to uphold its end of the deal. When a … Read More 

Teach Your Students to Negotiate the Principal-Agent Relationship with Fie’s Agent

Posted by & filed under Teaching Negotiation.

Negotiate International Sports Contracts In many business negotiations, especially those involving athletes, you will find an agent negotiating on behalf of the principal party. This unique principal-agent relationship can cause challenges at the negotiating table. The agent may have different preferences from their principal party. Agents may also have different incentives from the principal. Agents may … Read More 

Negotiate International Energy Contracts with ENCO

Posted by & filed under Teaching Negotiation.

ENCO: Negotiating International Contracts in the Face of Political Instability Negotiating international contracts can be tricky, and unstable, especially when governments are parties in the negotiation. ENCO is a Texas-based power company that has begun to move aggressively into emerging markets. The Indian government has approached ENCO to build an electrical generating plant to increase the power … Read More 

Beware Your Counterpart’s Biases

Posted by & filed under Conflict Resolution.

In the past we have encouraged you to ‘debias’ your own behavior by identifying the assumptions that may be clouding your judgment. We have introduced you to a number of judgment biases – common, systematic errors in thinking that are likely to affect your decisions and harm your outcomes in negotiation. Learn how to identify … Read More 

Creating and Claiming Value Through Haggling – Assess The Other Party’s BATNA in Dealmaking Negotiations

Posted by & filed under BATNA.

Now it’s time to assess the best deal you might get. Figuring out the other party’s reservation price is the key to knowing how far you will be able to push him, write Deepak Malhotra and Max H. Bazerman in their book Negotiation Genius: How to Overcome Obstacles and Achieve Brilliant Results at the Bargaining … Read More 

In The Simpsons Dealmaking, Harry Shearer Goes Public

Posted by & filed under Dealmaking.

How did actor Henry Shearer and the producers of the hit television show The Simpsons arrive at a win-win negotiated agreement? In this article drawn from examples of negotiation in real life, we examine the negotiations between the actor and the producers and offer insights into the bargaining strategies employed by each. … Read More 

In negotiations with rookies, the NFL takes control

Posted by & filed under Dealmaking.

At one point or another, most of us have found ourselves in the midst of a chaotic negotiation process—one that takes much longer than hoped for, creates a great deal of stress, and squanders resources. Now imagine having to face multiple such negotiations annually. For many years, that’s the situation National Football League (NFL) teams were … Read More 

Will you behave ethically?

Posted by & filed under Negotiation Skills.

A lack of transparency regarding negotiations between hospitals and the insurers known as preferred provider organizations, or PPOs, is a key contributor to spiraling health-care costs in the United States, according to an August article in the New York Times. The problem starts with the somewhat arbitrary, sky-high prices that hospitals put on their supplies and … Read More 

Got a raw deal? Renegotiate a better one

Posted by & filed under Dispute Resolution.

Many viewed the deal to be a terrible one from the start. In December 2008, Richard M. Daley, then Chicago’s mayor, announced that his administration had agreed to lease the city’s parking meters for 75 years to a private company for nearly $1.2 billion in an attempt to tackle a budget shortfall of about $500 … Read More 

What to Do Before the Deal Breaks Down

Posted by & filed under Dealmaking.

Whenever one side fails to meet its contractual obligations, renegotiation is more likely to succeed if the parties have a strong relationship. Ideally, the aggrieved party will value long-term relations more than potential gains from a claim for breach of contract. For example, a bank will be more willing to renegotiate a loan with a … Read More 

Training for Non-Face-to-Face Negotiations

Posted by & filed under Negotiation Skills.

Negotiating by email poses a set of challenges that one doesn’t often encounter in face-to-face negotiations. Without the benefit of seeing your counterpart’s body language, what one person might intend to be a straightforward request the other might perceive to be rude. A legitimate delay responding to an email offer by one party might be construed … Read More 

Successful negotiation strategies lead to bright future for 2011 Stanley Cup Champion Boston Bruins

Posted by & filed under Business Negotiations, Daily.

As Zdeno Chara, the captain of the Boston Bruins, hoisted the Stanley Cup at the conclusion of the 2011 Stanley Cup playoffs, fans could celebrate with abandon, secure in the knowledge that their star defenseman will be wearing black and gold through the 2017-2018 season. Without the last minute contract extension signed days before … Read More 

Help Your Organization Do More with Less

Posted by & filed under Business Negotiations, Daily.

Adapted from “How to Do More with Less,” by Lawrence Susskind (professor, Massachusetts Institute of Technology), first published in the Negotiation newsletter. Times are tough, and managers need to find a way to squeeze more out of every contract negotiation. How can you improve how your organization negotiates? Though we tend to think of negotiation as an … Read More 

The negotiating QB

Posted by & filed under Business Negotiations, Daily.

Adapted from “The Brett Favre Trade: A Win-win Deal in a Win-lose Game,” first published in the Negotiation newsletter. In the middle of the National Football League’s off-season, as legendary quarterback Brett Favre weighs for the third year in a row whether to return to football or accept retirement, it’s worth revisiting the negotiations behind his … Read More 

Pharma talks

Posted by & filed under Business Negotiations, Daily.

The PON Clearinghouse offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises.  The following role simulation is a three-party, multi-issue contract negotiation among representatives for an HMO and two pharmaceutical companies over the purchase of a new antidepressant drug. SCENARIO: Hopkins HMO is the largest independent managed health care organization in the … Read More 

Salvaging the deal

Posted by & filed under Daily, Negotiation Skills.

The Clearinghouse at PON offers hundreds of role simulations, from two-party, single-issue negotiations to complex multi-party exercises. Tendley Contract is a two-party integrative contract negotiation between a computer consultant and a school district representative at an apparent impasse over different expectations over cost of services. SCENARIO: A school district and a computer consultant are negotiating a … Read More 

Winners of Harvard Law School’s 57th annual Williston Competition Announced

Posted by & filed under Daily, News.

Winners of Harvard Law School’s 57th annual Williston Competition, Harvard’s annual contract negotiation and drafting competition for first-year law students, were announced on Monday, April 5. This year’s winners were: Best Contract Overall: Russell Herman, David Roth, Kristi Jobson and Aaron Dalnoot Best Representation of Save Our Square: Fentress Jamal Fulton and Betny Townsend Best Representation of McMillin’s: Adam … Read More 

How to Avoid a Do-Over

Posted by & filed under Business Negotiations.

Remember that big sales contract you negotiated last fall, the one that got you a fat year-end bonus? Well, your manufacturing department has just told you that delivery will be two months late. So now it’s your job to persuade your customer to accept a new date without canceling the deal. And that’s not all. … Read More 

Insights from a Communication and Negotiation Conference: The Benefits of Not Knowing

Posted by & filed under Daily, Negotiation Skills, Pedagogy at PON.

An Experiment: Exploring Interdisciplinary Linkages between Negotiation and Communication Studies What would negotiation pedagogy look like if we focused more on the core meanings and practices of communication? How can understanding the underpinnings of communication – the components of conversation and the exchange of meaning – help us understand and improve our negotiations? The weekend of … Read More