What should you consider during contract negotiations?

Summary

• Successful contract negotiations start with clear goals, preparation, and understanding the other party’s needs.
• Open communication and cooperation build trust and lead to stronger, longer-term agreements.
• Identify “deal breakers” early and know where flexibility is possible — it’s key to reaching balanced results.
• Professional legal support helps uncover hidden risks and ensure compliance with laws and market practices.
• Thorough documentation and post-signing follow-up safeguard business continuity and reduce future disputes.

Negotiations — the foundation of every agreement

In business relationships, however, there’s usually a negotiation phase before the final agreement is signed.
This is where both parties shape the content and conditions that will ultimately be written into the contract document itself.

Negotiation is a skill — and one that can be learned and improved. Strengthening those skills significantly increases your company’s chances of achieving favourable, sustainable agreements.

Set clear objectives and prepare well

Before entering negotiations, everyone involved should have a clear understanding of the company’s main goals — and which points can be flexible if necessary.
It’s worth having internal discussions with key people beforehand to define what can and cannot be negotiated.

Good preparation also means understanding the other party: their goals, decision-making process, negotiation style, and key contacts.
This insight helps set realistic expectations and anticipate potential challenges.

Open communication and collaboration

During negotiations, maintain open and transparent communication. It fosters mutual understanding and trust — and often speeds up the process.
Active listening and empathy are crucial. Show that you understand the other party’s position and look for compromises where possible, without undermining your company’s core interests.

When presenting your perspective, explain the impact rather than just the rule:

If we can’t agree on this term, here’s how it affects delivery, quality, or our ability to perform.

This kind of reasoning helps the other side see why a certain clause matters.
In long-term customer or partnership agreements, it’s especially important to consider how forced concessions can affect motivation and commitment on both sides.

Negotiation tactics: deal breakers and flexibility

Always identify the non-negotiable terms — the “deal breakers.”
These often involve pricing, confidentiality, competition clauses, or liability limits.
Make sure everyone at the negotiation table understands these boundaries to avoid inconsistent promises or conflicting positions.

At the same time, determine which terms can be more flexible.
Once trust is established, it’s easier to find compromises that serve both sides.
Flexibility — when used thoughtfully and strategically — often leads to better outcomes for both parties.

Even when dealing with larger companies that begin with their own contract templates and standard terms, smaller suppliers or partners can often successfully propose changes if they provide sound justification.

Legal expertise adds value

Not every contract requires a lawyer, but when the stakes are high, it’s wise to involve a contract law professional.
A specialist ensures your agreement meets legal standards and reflects current market practices and regulations.
More importantly, they help identify hidden risks that might otherwise be overlooked.

Think of legal expertise as a form of insurance — an investment that protects your company’s long-term interests and reduces both legal and commercial risks.

Document everything

Documenting discussions and decisions throughout the negotiation process is essential.
Verbal agreements and meeting notes often become relevant later when drafting or finalising the written contract.
Good documentation helps maintain clarity, especially when multiple people are involved.

It also protects your company if disagreements arise later about what was agreed.

Today, many organisations manage their contract processes digitally — using tools for version control, archiving, electronic signing, and deadline tracking.
This transparency not only reduces human error but also supports better governance and compliance.

Follow up after signing

Signing the contract isn’t the end — it’s the beginning of implementation.
Assign someone responsible for monitoring how the contract is carried out and for reporting deviations or changes.

For long-term agreements, schedule annual review meetings to evaluate cooperation, address issues, and discuss potential updates.
Consistent follow-up builds trust and keeps relationships strong.

Final thoughts

By setting clear goals, communicating openly, and documenting carefully, your company can make agreements that truly support your business objectives — and strengthen partnerships that last.

Ready to start improving your contract process?

Elina Koivumäki is a lawyer who founded Lexperience in 2016 after 17 years in law firms, and she continues to run the company as its entrepreneur. For more than 25 years, she has supported business and non-profit clients in legal matters related to marketing, sales, communications, copyright, and data protection.