How to negotiate a contract
Negotiating doesn’t come naturally to most people but with careful preparation and a basic understanding of what makes a workable contract, you will be better placed to negotiate a contract that works for you.
Contract negotiation is not something that should be seen as an ‘aggressive’ exercise. If you approach a negotiation with your eye on a good outcome for you and the hirer, you will have a better chance of success.
Good preparation is essential for successful negotiation. It will give you more confidence to negotiate and improve your chances of getting an outcome that works for you. Learn about the hirer’s business before you begin negotiations. Their website, if they have one, is a good place to start. What does the hirer produce? Who is their market? What are their strengths and weaknesses? But most of all, make sure you have a clear idea of what you want from the contract.
Be mindful of the way you present yourself and your business during negotiations and be respectful towards the hirer. Being business-like in your approach helps to build and maintain good business relationships. It will also help you and the hirer address potential problems before they arise.
Understand your rights
Independent contracting arrangements are governed by commercial and contract law, not by employment law. This means that you and the hirer are free to choose the terms of your contract within the limits of the law. However, a court may be able to set aside a contract if it is considered to be ‘harsh’ or ‘unfair’.
Make yourself clear
A contract should clearly and accurately reflect what you and the hirer have agreed and set out exactly what you expect from each other. If you cannot agree about a matter, you may need to discuss it in more detail so you better understand each other’s point of view. Do not enter into a contract hoping to sort it out later; because once it is signed the terms will be legally binding. A dispute is less likely if you and the hirer are happy with the terms of a contract from the start.
Write it down
It is good practice to take notes of all the negotiations and discussions you have with the hirer and record the dates they occurred. This should be done both before and after you sign the contract. If the contract has commenced, any discussions that change the terms of the agreement become a ‘variation’ to the contract or a new, separate contract depending on the content and the way it is agreed. You should attach a copy of the agreed changes.
Get advice before you sign a contract if you are unsure about the meaning of any terms or what you’re agreeing to. If necessary, get advice from your business adviser, union, professional association or lawyer before negotiating or signing. A lawyer can also review your contract to make sure it is legally enforceable.