When you created your goals for 2020, if you were anything like me, you had no idea what would happen in March. The pandemic has changed everything.
It is an especially tricky time for negotiating. When the Stay-at-Home orders started, many people were trying to determine how to break their agreements. There was a lot of discussion about force majeure clauses, termination provisions, and common law remedies to end a contractual relationship.
Now, as we have gotten a bit more accustomed to this new normal, businesses are pivoting and offering new services and products. One of the most important questions now is how do we negotiate new relationships when there are still so many unknowns.
Here are our three simple tips for negotiating new agreements during uncertain times.
Many people have set terms that they prefer to use in their agreements. These are a great starting point; however, given the current circumstances, we strongly encourage flexibility right now. You may need to alter some of your standard terms to ensure that you can move forward in the relationship.
We cannot over-stress the power and importance of communication. If both parties are willing to be flexible, it is key to ensure that you are properly communicating your needs, or misunderstandings can easily arise.
Important points to discuss include:
- Timing: If deadlines are firm, be specific. If there is some wiggle room, set the parameters. With so many uncertain schedules, if something has a firm due date, be very clear and specific. You can also provide date ranges if there is more flexibility.
- Scope of work: what is expected from the relationship? How are the services to be delivered? If any aspect of the scope of work may change, discuss what that might look like.
- Deliverables: If you may need to potentially modify deliverables, leave that option open. For example, if you are agreeing to travel six months from now, leave some flexibility, in case the dates will change due to any lingering restrictions. What happens if there are changes?
- Termination: Termination provisions are more important than ever in uncertain times. Thoroughly consider what the parties need to terminate the agreement. How much notice is required? What happens to any future payments in the event of a termination?
- Refunds: If you are a service provider, do you provide refunds? Do you give your clients the ability to stop payments on a payment plan? If you do not, make sure it is very clear with your clients. This is an area that often leads to disputes.
- Amendments/Modifications: Ensure that you have addressed what needs to be done in order to amend or update the agreement in the event that there are changes. What is the process to complete a modification or amendment?
Get it in Writing.
Once both parties are clear about the terms, capture everything in writing. Even though things are uncertain, don't skip getting a contract. Make sure you are thoroughly reading the agreements to ensure that you have captured the agreed-upon terms.