English
Arabic
Français
Español
Português
Deutsch
Türkçe
Dutch
Italiano
Russian
Romaian
Portuguese (Brazil)
Negotiating terms and conditions is an important part of finalizing any contract or proposal. As a freelancer, contractor, or business owner, being able to discuss and potentially change standard terms protects you and defines clear expectations with your client or customer. This blog post will outline some key things to consider when reviewing terms and conditions in a contract, and provide strategies for negotiating changes that are important to you.
Understanding Boilerplate Language
Many contracts and proposals use standard "boilerplate" language for common terms like payment schedules, confidentiality, intellectual property, etc. While these can feel like non-negotiable clauses, there is usually room for discussion. Take time to fully understand what is being asked of you in the boilerplate terms. Look out for clauses that could be improved to better balance risk. Things like liability caps, payment schedules, scope of work definitions are all common areas open to negotiation.
Know Your Bottom Lines
Before getting into negotiations, determine your own bottom lines - the key terms that you simply will not compromise on. These could include payment schedules, intellectual property ownership, indemnification clauses, etc. Having clarity on your must-haves going in will prevent you from giving too much away in negotiations. Make a list of 2-3 bottom line items and be prepared to stand your ground or walk away if they are not addressed.
Address Terms Gradually
Don't try to negotiate all terms at once. Prioritize the 2-3 you consider most important and start negotiations there. Get agreement and concessions on your highest priority items before moving on to other terms. This prevents overload and keeps negotiations focused on what matters most first. Revisit other terms after the key pieces are resolved favorably.
Propose Alternatives
When asking for a change to a term, have a clear alternative to propose. Simply requesting removal of a clause without a replacement is less persuasive. Come prepared with revised wording, addendums or carve outs that solve for your concerns while maintaining a workable agreement for both parties. This shows your request is constructive rather than just resistance for its own sake.
Clarify Ambiguities
Vaguely worded terms leave too much room for disputes down the line. If a clause is ambiguous, ask that it be rewritten for clarity. Note specific words or phrases that need better definition. For example, rather than just calling something "confidential", specify that trade secrets, pricing and personal information must be kept private for 5 years. Precise language leads to shared understanding.
Reference Industry Standards
Many contract terms have become standardized within certain industries. If relevant, referencing these norms works in your favor. For example, noting that a 60 day payment term is customary for your type of work implies the other party's 30 days is more burdensome than usual. You can suggest aligning with what competitors commonly offer to appear reasonable.
Avoid One-Sidedness
Draw attention to any clauses that are blatantly one-sided in favor of just one party. For example, if you assume all liability but they have none, point this imbalance out. Suggest rewriting for mutual obligations. Both parties should share reasonable responsibilities and protections. One-sided terms may indicate other unfavorable elements hiding within. Balanced is always better than biased when it comes to agreements.
Leverage Your Value
If negotiating fails, you still have leverage - you simply don't accept the contract. Remind the other party of the value you bring and that you aim to create a mutually beneficial partnership, not a one-sided legal headache waiting to happen. Calmly note you are prepared to part ways amicably if key business and legal interests can't be aligned through discussion of the terms. Having viable alternatives keeps you from settling for an unfair deal.
Establishing Rapport and Trust
Keep the overall discussion positive, solution-focused and interest-based. Remember the other side want a workable deal too, so find common ground where you can agree. Compromise where possible but stick to principled stances on your priorities. Maintain cordial rapport throughout to build trust for future negotiations. Leaving people feeling heard and respected increases chances of productive give-and-take.
Following Up in Writing
Send written confirmation of any agreed upon changes to terms. This protects both parties going forward by formally documenting the negotiated contract. Ask them to acknowledge the revisions in writing before proceeding with work. Paper trails are essential should future disputes arise over what constituted a binding deal. Continually update your negotiation records for reference.
When to Walk Away
If after exhausting good faith negotiation efforts core business needs remain unmet, politely disengage from that potential deal. There may simply be irreconcilable differences on key points. Have the confidence to know when compromise further harms your interests, and wish them well finding another suitable partner. Walking maintains self-respect while opening opportunities where terms can be addressed properly from the start.
Conclusion
Negotiating contracts is an essential business skill involving both principles and tactics. With thorough preparation and pragmatic yet principled negotiation approaches, freelancers and business owners can craft agreements protecting their needs while establishing mutually beneficial partnerships. While standard boilerplate language is meant to feel non-negotiable, opportunities almost always exist to align legal terms fairly for both parties through open discussion. With practice, you'll negotiate from experience instead of fear or assumption.
