How Contract Savvy Are You?

‘Contract’ is one of those words used so often in business that its fundamentals are taken for granted. Written, verbal or otherwise, contracts should not be entered into lightly to avoid breaching or committing to an onerous agreement. We all know the pitfalls of signing on the dotted line, but if you doubt the legitimacy of an oral agreement, ask Jerry Seinfeld who recently came under fire for failing to pay his real estate broker a commission of over $98,000. Seinfeld testified that since broker, Tamara Cohen, was unable to show him the property he eventually purchased, he was not obligated to pay her. The judge ruled in Cohen’s favor, stating that their sales contract was still in effect. (Read more at Law.com) No matter what side of the table you’re on, these tips will expedite your contract process. You’ve submitted your proposal, and your client liked what he saw—so, what’s next?

• Make sure that you and your client settle all modifications to your proposal to the best of your ability prior to developing the contract.
• Identify all parties involved in the negotiation and contract development phase.
• Develop your negotiation strategy and timeframe of contract development. Try to adhere to it.
• Define your negotiation catalyst. (It is best to start with contract terms and move on to fees and cost.)
• Be realistic about what you can and cannot deliver.
• Clearly define payment and cost parameters.
• Keep track of issues and contingencies that have the potential to develop into discrepancies.
• Be sure that your contract can be legally enforced.
• Schedule a formal review of the final contract.