Contract Negotiations How to Reduce The Risks?

Contract Negotiations How to Reduce The Risks?

The process of negotiating a contract hasn’t changed, even though the technologies to simplify it have. Let us take you through why manual contract negotiations pose a risk for the business and how you can effectively curtail the risks that are attached to contract negotiations.

What Is the Meaning of Contract Negotiations?

Just as the name suggests, contract negotiations are the process of coming to an agreement on the terms included in the contract. When parties negotiate contracts, they try to obtain favorable terms for themselves to reduce liabilities and obligations.

This results in quite a few amendments to the initial contract draft. Although these negotiations always increase the contract turnaround time.

Challenges to Contract Negotiations

Negotiations of a contract delay the entire contract lifecycle quite a lot. This impacts the business in a harsh way. A lengthy and stretched negotiation process can be an uphill road for business growth as contracts do not reach finality in the expected timeline.

Negotiations can happen in real-time as well – over a phone or email. This can lead to more delays as the changes take time to reflect in the actual draft. This process goes on till the parties are not on the same page. These challenges increase triple-fold when the contracts are multiparty.

Let’s look at some top challenges that are universal across the contracting vertical:

What Is The Scope Of Contract Analytics?

The data that contract analysis gets you access to can do wonders for your contract lifecycle management. For example, you may require an overview of your contracting portfolio with a client to determine which contracts are near their expiry. It sorts through the relevant meta fields and assists you to grasp accurate information to obtain more insights.

Let us understand in-depth all the actionable information that you can derive from your contracts.

  • 1. Coordination : All the parties must come together to negotiate a contract and agree to the terms. However, the coordination that is required itself is very exhaustive in nature, it is very easy to lose track of important changes.

  • 2. Absence of central system: Many lawyers as well as in-house law departments lack a good central system that can manage and track contracts and negotiations. They spend colossal time in doing this work manually – putting together every small piece of information and changes of multiple contracts.

  • 3. Errors Because the management of contracts and the tracking of negotiations are so haywire, it is easy that vital information can be overlooked or typing errors may occur. With negotiations, as they get more complex depending on the nature of the contract, it can become increasingly tough to have an entire flow of required changes. This can, in short jeopardize the whole on the contract.

    The Solution

    Negotiations are the most beneficial when the parties involved are able to come to an agreement and the changes are made in accordance with-in a stipulated timeline. If the negotiations happen through contract management software, the parties would be able to achieve a faster turnaround time. It adds on if the parties involved are using the same platform and are familiar with its interface. The ease of use is a critical aspect of any software.

    What to look for in a contract negotiating tool?

  • Seamless tracking of negotiations across all your business platforms. The tool has to give you the ability to track changes and check their status.
  • The tool should be easy to use and must give you a modern interface with as much functionality as possible. Categorizing, sorting, emailing, etc has to be user-friendly.
  • If a contract management tool offers you an in-built negotiation tool, then that’s the best choice. This will keep everything related to your contracts in one place.
  • Explore our Contract Management System and experience the change in the negotiation cycle with faster turnaround times, automated templates, creation of standard contracts and much more.