The importance of approaching contract negotiations with confidence. Legal support.
It is common sense to recognize the importance of a written contract in regulating business relationships. Contracts create trust and security, facilitate the establishment of lasting relationships, prevent conflicts, and adapt the rules to the specific circumstances of the parties.
It must be acknowledged, however, that not every contract will necessarily produce these effects, and that, apart from the fact that the market or the particular circumstances of the parties often dictate their final outcome, these contracts are frequently born already flawed by aspects that have occurred in the negotiation or in the drafting of the document.
In this article, I would like to offer some key points or advice on this matter. Some of these tips may not be very relevant when the contract is merely a formality or of little consequence, but I believe they can be helpful if the aim is to regulate a relationship of some importance.
This list, which I propose in two installments, is not intended to be comprehensive or categorical, and to a large extent, these items come from our own professional experience in this regard:
- Identify the objective:every contract should be integrated within the company's Business Plan; the relationship to be established must be desired and carefully considered. Only then can we identify our objectives and distinguish what is essential and what is negotiable.
- Every contract is unique: Templates or forms are very useful; they usually contain a series of elements that are basic to each type of contract and provide a good foundation for drafting them. However, they naturally don't address the particular circumstances of the case or the specific interests of the parties. The expertise of a professional is invaluable in this regard.
- Avoid adhesion contracts: linked to the previous point. By definition, these are contracts in which there is no individual negotiation of the clauses, and therefore, one of the contracting parties adheres to what the other party, who in many cases has opposing interests, proposes.
Beyond those that are legally defined as such and that have their legal counterweights, any contract that is signed without being fully aware of the effects that its agreements may have, can have the same perverse consequence for one of the parties: placing them in a situation of imbalance that will extend throughout the validity of the contract.
- The legal approach must be multidisciplinary: Often, a sound commercial contract entails an unmanageable tax burden, has undesirable labor-related consequences, or fails to address intellectual property issues vital to one of the contracting parties. It is advisable that, when relying on a professional, that professional , in turn, can be supported by a team of specialists in other areas.
- A detached approach: the passion with which an entrepreneur approaches their business might be perfect for securing a contract, but counterproductive when negotiating the details. If we are clear about our objectives and can communicate them effectively, a professional's objective and detached perspectivecan be invaluable in putting them into practice and formalizing them in a written agreement.
In the second part of this article we will cover another series of items, perhaps of a more technical nature, which I also consider very important in this matter.
At Àmbit we can assist you with guarantees if you require professional support when dealing with a contract, whether it is a purchase and sale agreement, a banking contract, an association agreement or a commercial representation agreement.
Feel free to contact us: ambit@ambitassessor.com
Marc Ivars
Lawyer
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A Àmbit Assessor, SL has 40 years dedicated to the tax, comptable and labor consultancy of the Pime.
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