Ever hear the expression – “you never get a second chance to make a first impression”? It’s true in business transactions, and particularly in contract negotiations.
So, what’s my point? After all, many contract negotiations go on for weeks, or even months, and countless drafts are exchanged. So, don’t you really get many opportunities to “get it right”? The answer is, generally, no. Let me explain.
Twice in the past week, I’ve had clients send me a contract for “final review,” only to find out that the contract had actually originated with my client and had already been provided to the other side for review and comment. The problem was, in each case, the contract provided to the other side had substantial problems for my client. By problems, I don’t mean language that I preferred had been worded differently or minor clerical errors. I mean material issues that were overlooked or improperly drafted in such a way that it put my client at substantial risk – business and legal.
This scenario causes problems for a number of reasons. First, it limits your options. Do you (or really, can you even) go back to the other side and ask that substantial changes be made to the contract? If so, do you now have a lack of trust or credibility? Do you give the impression that you are disorganized, or worse yet, unprofessional?
Second, assuming you do go back with changes, do you highlight issues that may have been perfectly acceptable if they had been in the original draft, but that now are subject to strong objection? After all, the initial proposed contract was all about mutual give and take and compromise, whereas these changes are now almost certainly entirely in your favor. Will you have to give something back in return?
Third, by going back, do you delay the process, and perhaps threaten the deal entirely?
And finally, have you placed yourself in a position where you really can’t go back to the other side, and instead simply have to accept the contract as-is?
The moral of the story is, carefully consider the deal (hopefully in cooperation with legal counsel) before you present the first draft of the contract. If you don’t, you may find that you never get the deal that you wanted – or at all.