Speedy Contracts Signal Risk
Updated: Nov 29, 2018
Have you ever been tempted to sign back a customer contract quickly because your gut told you the deal was a “sure thing”? Focusing on the here and now has benefits, and no one likes to keep a customer waiting, but when a contract is used to define a relationship and there is pressure to respond quickly with a signature, this should set off an alarm bell. Without a thorough contract review you may be putting your business at risk and possibly short-changing your profitability.
The Forgotten Factors
Unsurprisingly, when contracts are written by customers, it’s not uncommon to discover some basic conditions important to sustaining the relationship and possible benefits to your business are left out. These conditions might include: provisions for future price adjustments, force majeure, terms of payment, an understanding of how disputes will be resolved, and under what time condition shall the resolution (if any) be met. Leaving them out is like eating an Oreo ® cookie without the filling!
Having “The Talk”
Sometimes fear stops customer conversations, even the essential ones from taking place. Situational anxieties can crop up and we might be more concerned with upsetting a large customer by not responding in the timeline provided, and especially if they have acted as if your competitor is just as ready to sign the deal as is. Stop. Take a breath. The fact that you have a contract to review from a customer means they have already taken the first step to commit to your business. This should be a sign that you are into the next transition of your negotiations and not at the end of them.
So often we’ve heard the refrain about non-negotiable or not-negotiable over this or that. And generally delivered straight-faced or with an edge in the voice that’s clearly meant to indicate that someone really means business. It’s obvious they are looking for you to back down, to simply give up and forget about asking for anything else. If only it were that easy. Non-negotiables should be a sign to ask for more information and clarity on what might be the reasoning behind the position. Once dialogue opens up then creativity has an opportunity to enter the discussion and you might more easily steer the talks toward shared expectations. If neither party can continue because the benefits are so lopsided, then how could anyone expect the relationship to persist?