{"id":176097,"date":"2022-09-27T04:49:51","date_gmt":"2022-09-27T03:49:51","guid":{"rendered":"https:\/\/legalvision.co.uk\/?p=176097"},"modified":"2024-05-28T04:25:14","modified_gmt":"2024-05-28T03:25:14","slug":"common-mistakes-negotiating","status":"publish","type":"post","link":"https:\/\/legalvision.co.uk\/commercial-contracts\/common-mistakes-negotiating\/","title":{"rendered":"Common Mistakes When Negotiating a Commercial Contract With Another Business in the UK"},"content":{"rendered":"\n<p>As a business owner, you will have experience entering into commercial deals with other companies.&nbsp; While some negotiation processes are relatively straightforward and swift, others can be more complex and arduous. Given the potential value of some commercial arrangements, you may encounter various challenges during any contract negotiation process. This article will explore some common mistakes businesses make when negotiating a commercial contract with another company, so your organisation can put strong commercial agreements in place.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Why is Negotiation So Important?<\/h2>\n\n\n\n<p>Preparation is an essential part of your business <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/negotiating-business-contracts\/\">negotiating<\/a> a commercially beneficial agreement. Simply put, failing to adequately negotiate a business contract with another company will likely result in a contract biased towards them.<\/p>\n\n\n\n<p>So, for example, you may suffer a contract that allows the other party to:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>withhold payment in unreasonable circumstances;<\/li>\n\n\n\n<li>use your images and intellectual property without your prior consent;<\/li>\n\n\n\n<li>exit the commercial arrangement at short notice (or no notice);<\/li>\n\n\n\n<li>terminate the contract without payment of damages or exit fee; or<\/li>\n\n\n\n<li>perform unusual actions or place overbearing duties on your company.<\/li>\n<\/ul>\n\n\n\n<p>Given that a commercial contract is a written, legally-binding record of a deal between two companies, it must suit your organisation as well as the other party. Accordingly, negotiating plays a very important role.<\/p>\n\n\n\n<p>Let us consider some common hurdles companies face when negotiating commercial agreements.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">1. Unbalanced Negotiations<\/h2>\n\n\n\n<p>A typical example is where one company uses a lawyer to negotiate while the other does not.&nbsp;&nbsp;<\/p>\n\n\n\n<p>A <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/legal-advice-signing-contract\/\">commercial contract lawyer<\/a> can successfully deduce which sections of a draft contract are the most vital and how to put forward a proposed \u2018compromise\u2019 in their client\u2019s favour. A lawyer will also be harder to pin down because they can phrase things neutrally and avoid confrontational language. Accordingly, this makes it harder to learn their client\u2019s true intentions within negotiations. This may result in your organisation having to agree to a bad deal.<\/p>\n\n\n\n<p>Finally, a company receiving <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/commercial-dispute-law\/\">advice from a lawyer<\/a> will know which parts of the contract are reasonable and balanced and which require amendment. Their lawyer will enable them to make strong amendments using neutral language and sound reasoning. In summary, the art of negotiation is second nature to commercial contract lawyers.<\/p>\n\n\n\n\n<a href=\"#content-next\"\n   class=\"block p-4 mt-10 text-xl font-bold text-center text-white no-underline bg-gray-800 rounded-t-xl\">\n    Continue reading this article below the form\n    <i class=\"text-xl fa-regular fa-arrow-down\"><\/i>\n<\/a>\n<div class=\"px-6 pt-10 pb-12 mb-10 text-center bg-gray-100 rounded-b-xl sm:px-12 test\">\n    <div class=\"mb-8 text-2xl font-bold text-orange\">\n        Need legal advice?\n        <br>\n        <span class=\"text-lg not-prose\">\n                            Call <a href=\"tel:+448081968584\" class=\"not-prose\">0808 196 8584<\/a> for urgent assistance.\n                <br>\n                Otherwise, complete this form, and we will contact you within one business day.\n                    <\/span>\n    <\/div>\n\n    \n\n<div class=\"not-prose flex justify-center text-left gform_input_bg_white    \">\n    <script>\nvar 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Misinterpreting Contractual Wording<\/h2>\n\n\n\n<p>This leads to another common issue, which is misinterpreting contractual wording. Certain types of commercial contracts tend to contain language in a legal style (otherwise nicknamed \u2018legalese\u2019).<\/p>\n\n\n\n<p>Sometimes the literal reading is different to the actual effect of that clause. For example, some potential business partners may seek to add clauses that their lawyer has advised them to have no real legal effect, just on the off chance that you fail to notice (and follow the clause regardless).<\/p>\n\n\n\n<p>On the flip side, sometimes a clause can seem tame and innocuous but, in reality, proves itself to have a nasty side-effect after the contract starts.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">3. Agreeing to Things Outside the Contract<\/h2>\n\n\n\n<p>This is a common pitfall within contract negotiations. The primary point of a commercial agreement is that it records everything of note within a deal between businesses.<\/p>\n\n\n\n<p>Therefore, it is vital to avoid making \u2018informal\u2019 arrangements outside the contractual wording. Terms outside the contract are unlikely to be binding on the parties, and there may be little your company can do if the other business changes its mind later.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">4. Failing to Validly Sign the Written Agreement<\/h2>\n\n\n\n<p>Once the negotiations and drafting have been finalised, the final stage involves signing the written agreement. Here, it is essential that you validly sign the contract.<\/p>\n\n\n\n<p>Different contracts require various forms of signature (and witnesses), so it is helpful to obtain legal advice before attempting to sign. There is little point in engaging in <a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/commercial-negotiations\/\">successful negotiation<\/a> but failing to ensure the final agreement is legally binding.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Key Takeaways<\/h2>\n\n\n\n<p>Every negotiation is different and depends on the nature of the agreement and the parties involved.&nbsp; However, an effective negotiation style can help your company reach the best deal possible. Many business owners use expert lawyers due to their experience and expertise in drafting and finalising written agreements. However, even within more simple contracts, the main takeaways include the use of neutral language and the setting of sensible and clear negotiation lines.<\/p>\n\n\n\n<p>If you need help negotiating your commercial agreements, our experienced <a href=\"https:\/\/legalvision.co.uk\/contract-lawyers-lp\/\">contract lawyers<\/a> can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on <a href=\"tel:+448081968584\" class=\"AVANSERnumber dynamic-number\">0808 196 8584<\/a> or visit our <a href=\"https:\/\/legalvision.co.uk\/membership\/\">membership page<\/a>.&nbsp;<\/p>\n\n\n\n<h2 class=\"wp-block-heading\">Frequently Asked Questions<\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1664250258633\"><strong class=\"schema-faq-question\"><strong>How can I prove my negotiation skills at the bargaining table?<\/strong><\/strong> <p class=\"schema-faq-answer\">Usually, by ensuring that you put forward your company&#8217;s stated purpose in negotiations and use a friendly and neutral tone. Business negotiations can live or die on the relationship between the negotiators rather than just the financial side.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1664250268250\"><strong class=\"schema-faq-question\"><strong>What should I avoid in contractual negotiations?<\/strong><\/strong> <p class=\"schema-faq-answer\">It is vital to start negotiations in the right way. Thus, opening talks with aggressive, confrontational language and tactics could drive the other business away. Rather, ensure your manner is professional and inviting.\u00a0<\/p> <\/div> <\/div>\n\n\n\n\n<div class=\"not-prose m-feedback-prompt\">\n    <!-- Thumbs up\/down bar -->\n    <div class=\"m-feedback-prompt__main\">\n        <div class=\"m-feedback-prompt__title\">Was this article helpful?<\/div>\n        <div>\n            <!--span class=\"m-feedback-prompt__button--text\">Thanks!<\/span-->\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--yes\"\n                    data-analytics-link=\"feedback-prompt:yes\" aria-label=\"Agree\">\n                <i class=\"fa-regular fa-thumbs-up fa-3x\"><\/i>\n            <\/button>\n            <button type=\"button\" class=\"m-feedback-prompt__button m-feedback-prompt__button--no\"\n                    data-analytics-link=\"feedback-prompt:no\" aria-label=\"Disagree\">\n                <i class=\"fa-regular fa-thumbs-down fa-3x\"><\/i>\n            <\/button>\n        <\/div>\n    <\/div>\n\n    <!-- Feedback form -->\n    <div class=\"m-feedback-prompt__form\">\n        <div class=\"m-feedback-prompt__form--thanks \">\n            <div>Thanks!<\/div>\n            <p>\n                We appreciate your feedback \u2013 your submission has been successfully received.            <\/p>\n        <\/div>\n        <form id=\"contact-form\" class=\"m-feedback-prompt__form--form\" action=\"\" method=\"post\">\n            <input type=\"hidden\" id=\"authenticity_token\" name=\"authenticity_token\" value=\"9eb4f72322\" \/><input type=\"hidden\" name=\"_wp_http_referer\" value=\"\/api\/wp\/v2\/posts\/176097\" \/>            <input value=\"https:\/\/legalvision.co.uk\/commercial-contracts\/common-mistakes-negotiating\/\" type=\"hidden\" name=\"currenturl\"\n                   id=\"currenturl\">\n            <input value=\"Common Mistakes When Negotiating a Commercial Contract With Another Business in the UK\" type=\"hidden\" name=\"currenttitle\"\n                   id=\"currenttitle\">\n            <label>\n                <!-- display on thumbs-up -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--yes\">\n                    Can you tell us <span class=\"font-semibold\">why<\/span> you found it helpful?\n                <\/span>\n\n                <!-- display on thumbs-down -->\n                <span class=\"m-feedback-prompt__feedback m-feedback-prompt__feedback--no text-lg\">\n                    How can we better improve this article?\n                <\/span>\n                <textarea name=\"feedbackmessage\" id=\"feedbackmessage\" required><\/textarea>\n            <\/label>\n\n            <div class=\"m-feedback-prompt__form--error\" id=\"form-submit-error\"><\/div>\n            <button id=\"submit-contact-form-button\" type=\"submit\" name=\"commit\" class=\"m-feedback-prompt__form--submit\"\n                    data-analytics-link=\"feedback-prompt:submit\">\n                Submit            <\/button>\n        <\/form>\n    <\/div>\n<\/div>\n","protected":false},"excerpt":{"rendered":"<p>As a business owner, you will have experience entering into commercial deals with other companies.&nbsp; While some negotiation processes are relatively straightforward and swift, others can be more complex and arduous. Given the potential value of some commercial arrangements, you may encounter various challenges during any contract negotiation process. This article will explore some common<a href=\"https:\/\/legalvision.co.uk\/commercial-contracts\/common-mistakes-negotiating\/\">Continue reading <span class=\"sr-only\">&#8220;Common Mistakes When Negotiating a Commercial Contract With Another Business in the UK&#8221;<\/span><\/a><\/p>\n","protected":false},"author":13349,"featured_media":3196,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_relevanssi_hide_post":"","_relevanssi_hide_content":"","_relevanssi_pin_for_all":"","_relevanssi_pin_keywords":"","_relevanssi_unpin_keywords":"","_relevanssi_related_keywords":"","_relevanssi_related_include_ids":"","_relevanssi_related_exclude_ids":"","_relevanssi_related_no_append":"","_relevanssi_related_not_related":"","_relevanssi_related_posts":"2234,1986,1443,1015,994,1513","_relevanssi_noindex_reason":"","editor_notices":[],"footnotes":""},"categories":[37],"tags":[20,21,360,393],"class_list":["post-176097","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-commercial-contracts","tag-small-business","tag-medium-business","tag-commercial-contract","tag-negotiation"],"acf":[],"yoast_head":"<!-- This site is optimized with 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