Contract negotiation is often a tiresome and long process. Legal teams are not always able to provide a clear objective and thus lead negotiations inefficiently. The situation is further complicated when the two sides fight over the smallest details in an effort to get the best deal for themselves.

The truth is negotiations don’t have to be hard! If you know what you want and how much you’re willing to budge before calling the deal off completely, all you need is a clear negotiation strategy. We have prepared some tips for effective and efficient business contract negotiations.

Draft your contract

Before you can begin to negotiate, you need some sort of base for your contract. That’s your draft! In the draft, you can outline everything you want from this contract. The draft doesn’t have to be too specific, though it should contain all the main points that you want to include in the contract. Make sure to collaborate with the other party and agree on all the main parts of the contract.

Drafting contracts can be annoying and time-consuming. It is a meticulous process that calls for your undivided attention. That’s difficult to achieve when you’re using templates. There’s no reason you should draft your contracts from scratch if you have relevant templates that have worked for you before. Unfortunately, it’s easy to lose track of details and formatting.

Loio legal software can help you with that part of your first draft. It will highlight all the important details that need double-checking, like addresses, names, and telephone numbers. It will also make sure the formatting is consistent throughout the document.

Break it down

You probably already know that getting the other party to agree to the first draft of the contract is nearly impossible. Besides, after careful consideration, you will probably want to make some changes too. In order to make this process easier, don’t ask the other party to send you back the whole contract with their notes. Instead, break it down for them into smaller sections.

If a contract has 10 sections, there will probably be a few that the other party won’t dispute. In that case, you have something to work with. It is also easier to make notes on separate sections than on a contract as a whole. You will then have a better time editing these individual sections to suit the needs of both parties.

Know the purpose of the contract

Contracting parties often end up fighting because they have very different objectives for the contract. Some don’t even know what their objectives are! In an ideal world, the objective of the contract would be the same for both parties. If that’s not the case, you have to at least know what yours is. That’ll make it easier to convey your point of view.

If you know what you want from the contract, you know which sections to prioritize, and which can have some wiggle room. For example, you can choose to be very firm on the price but compromise on the deadlines. Knowing what matters to you most can be quite helpful in contract negotiations. Not knowing, on the other hand, can force you to agree to terms that are not favorable to you at all.

Understand the other party

You’re not alone in this; you have a partner that you need to think about as well! After all, if you were alone, you wouldn’t need a contract. Think about the other contracting party. What do they expect to get out of this negotiation? What is their purpose for entering into this agreement? What are their main goals and objectives? How are they similar to yours?

If you can understand the other party better, you can come up with creative solutions that will benefit both of you. Instead of pushing them to agree to your terms, you can reinvent the contract in a way that would be mutually beneficial. Of course, that’s the dream, and in real life, people rarely agree right away. However, if you make an effort to understand the other party, you can have better insight into what matters to them and where they can budge in your favor.

Don’t rush

It’s human nature; we want to do everything fast! Especially now, in the age of technology, speed is often more important than accuracy. But not in the contract negotiation process. Here, you should take all the time that you need. If you’re not sure about a certain section, take a few days to think it over. If you’ve hit a wall, take a day off and come back to it tomorrow. You might see the situation in a new light!

Often, we end up having to rush through this process because we didn’t account for all the time we might need from the beginning. If you’re just starting, keep in mind that negotiations may last longer than you think. You’re not the only person who will need some time to think every draft over. The other party is in the same boat, and they will need just as much time, if not more. Rushing through this process may result in unfavorable conditions for both parties.


Before you go into the negotiation process, you have to choose the approach you’re going to take. If you’re not clear on the contract negotiation strategies you prefer, you cannot expect a favorable outcome. It is very rare that things just “work out”. You need to make it happen by adopting a successful approach. Once you’re clear on what you expect from the negotiations and what your boundaries are, you can crush it!

Contract negotiation is often a lengthy and stressful process, but it doesn’t have to be! If you do your research, identify your main objectives, and come well-prepared, it can all be smooth sailing. Don’t test your luck and do your homework before meeting with the other contracting party.