A Brief Introduction About the Negotiated Contracts
As per the negotiating definition, Negotiated contracts or negotiated agreement can be referred to as a form of procurement with some contractor without going through the bidding process. The negotiated agreement can be used for procuring a building or some other asset. In the given agreement, the client is expected to appoint a specific number of suppliers. There is a series of procedures that can be procured for the selection and appointment of the suppliers. These are:
- Selective procedures
- Negotiated procedures
- Open procedures
- Serial procedures
- Framework procedures
The benefits, as well as drawbacks of each procedure, is considered before defining the scope & objectives of the given project. Some of the typical procedures might involve some sort of competitive bidding between several contractors.
Who Takes the Negotiated Contracts? – People Involved
Once you are aware of ‘what is the meaning of negotiation,’ you can frame the desired negotiated agreement or contract. Typically, a negotiated contract is signed between a client and a contractor who has had previous experience of working together while developing a relationship of trust with each other. If you are searching for ‘what does negotiation mean,’ then it is imperative to understand that negotiation agreements are the ones in which a particular firm gets targeted.
Purpose of Negotiated Contracts – Why do You Need it?
As per the negotiation terms, a negotiated agreement or contract negotiations can be defined as the process involving compromising or discussing the specific terms & conditions of the contract towards reaching a final agreement between more than one party involved in the given transaction. In most cases of contract negotiations, each party makes an effort to negotiate for the best available interest for the given transaction or business. There can be the involvement of a series of back & forth communication. However, most of the negotiation terms are known to boil down to factors like revenues & risks.
Contents of the Negotiated Contracts – Inclusions
When you are entering into negotiated contracts or contract as per the specific business law terms, then you must be aware of the common contents of the contract. Typically, any contract that is negotiable is known to contain the following vital information:
- Title of the Contract
- Purpose or Introduction
- Parties Involved
- Definitions & interpretations of the contract
- Subject Matter of the Contract
- Place & Date
- Others Terms & Conditions
- Payment Details
How to Draft the Negotiated Contracts?
Virtually, with all available business contracts that are negotiable, the respective parties are expected to pen down the specific terms & conditions of the agreement. Contract law requires that specific types of deals should be made in writing to enforce the same legally. Some of the additional tips for drafting the negotiated contract are:
- A valid contract must specify clear and focused terms & conditions
- You should keep short sentences for avoiding ambiguity
- You can look through sample draft agreements before composing the final draft
- Make sure that the names and contact details of the involved parties are accurate
- Define the important terms & conditions explicitly
- All the involved parties should sign the contract
If you are looking for answers to ‘how to negotiate a contract,’ then here are some additional negotiation tips for you:
- While negotiating, always have a clear objective.
- Try to go on a negotiation spree only after in-depth study or research
- Consider what you exactly expect out of the other party
- Try building relevant trust with the other party
- You should possess a draft of the contract beforehand
- Listen to the concerns of the other party as well
Benefits & Drawbacks of the Negotiated Contracts
When you are signing the negotiated contracts or agreement with the other party, it is recommended that you should be aware of the involved benefits as well as its drawbacks. Some of the potential points of the benefits of the contract are:
- Clients receive the flexibility when it comes to choosing the preferred contractor in the contract
- Cost, as well as time savings, are assured –as far as the removal of the tendering process is concerned
- A negotiated agreement can allow for early involvement of the supplier
- The pricing and cost of the contractor tend to be more transparent in this agreement. This is because they are not seeking any kind of win in the bidding process on the lowest possible tender
Some of the major points of drawbacks of the given agreement might be:
- The clients are given fewer options when it comes to choosing between the parties –therefore, less scope for innovation
- The costs might drive up because of the lack of any type of competitive bidding
- There tends to be a form of heavy reliance on either party of the contract
- Unless the agreement is carefully structured as well as controlled, the process of negotiation(1) might create an adversarial environment –even before the awarding of the contract
What Happens in Case of a Violation?
Beaching or violation of the negotiated contracts serves to be a legal cause of action in which a specific binding contract or bargained-for exchange might not be honored by the involved parties. If any party is not able to fulfill the respective contractual promise in the given setup or has provided information to the other party that it will not be performing the duties as specified in the agreement, the party is said to violate the contract.
If you are attempting to go for negotiating a contract, it is recommended to take professional help from a reliable lawyer or attorney. A lawyer can help you in understanding the specific terms & conditions of the agreement before you go ahead with signing the same.