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Should you give clients the details during contract negotiations?

by | Mar 3, 2017 | Contract Disputes

Renegotiating contracts should always be serious business. When you approach someone and indicate that the current agreement isn’t working for you — for any reason — you automatically make yourself somewhat vulnerable in the interaction. Already, the other side knows what you don’t want or what isn’t working, and in some situations, they can leverage that against you. But what do you do if market changes or other factors have turned a previously lucrative agreement sour? One business man says you lay all your cards on the table.

The owner of a fuel-supply company did so when he faced a lack of profit due to rising fuel costs and a large number of locked-in pricing contracts. He spent about a month meeting with his customers and offering them a different deal — one that involved them paying more in the long-term. The owner said he was honest about why he was trying to negotiate a new contract and that he even laid out his own costs in detail for his customers. Essentially, he said that if the customers didn’t change contracts, his business would likely go under.

In that particular case, the tactic worked. The fuel-company retained most of it’s clients, many switched to new contracts and no one engaged in litigation over the matter. That won’t always be the case, though, and some experts note that if you put all your cards on the table, you could be providing the other side with fuel for an upcoming legal battle.

Understanding whether you should give details or not is part of becoming experienced at negotiations. Before you take any action, though, consider consulting with a business law professional who can provide information about potential outcomes, letting you make the most educated decisions.

Source: Inc., “When Good Deals Go Bad,” Dee Gill, accessed March 03, 2017