Every Business Needs a Good Negotiator
When it comes to contracts with vendors, with employees, and many other sources of agreements that your business engages in every day, a strong negotiator is essential. Attorneys are uniquely positioned to handle contract negotiation issues that arise in your business. Why is this the case? Simply put, attorney’s are trained to recognize the underlying law in a given contract and use that knowledge to negotiate the best possible outcome for your business.
I’ll often hear from business owners that a contract is simply canned phrases, or boilerplate. For business owner’s that hold the belief that a contract is simply a patchwork of reused phrases it is sometimes difficult to explain the need for an attorney to negotiate for the most beneficial contract terms for the business in question. Such CEO’s and owners of businesses tend to believe that they will negotiate the terms in a face to face meeting with the opposition and iron out issues there, that the contract itself is merely a formality. The difficulty with this common belief is that the devil is waiting in the details of the written contract, meaning that should one party to a contract file a breach of contract action against the other party, it is the details within the written contract that will likely be used by the court to decide the case (not necessarily the terms ironed out in face to face meetings). It is for this reason, the importance of the written word in every contract, that each contract must be individually tailored to the business in question. Arriving at an individually tailored contract requires an attorney with experience in negotiation coupled with an understanding of applicable Massachusetts contract law. The bottom line is, that while an owner or CEO should be highly involved in the negotiation of a contract and certainly the ultimate arbiter of whether or not to go forward with any contract, a good attorney serves as a risk manager so that the decisions made by the business owner during the negotiation are informed decisions.
Essential Contract Elements
CAPACITY
In order for a contract to be considered enforceable by the courts, the parties to the contract must have the capacity to enter the contract in the first place. This means that minors, an intoxicated individual, or a person with a mental disability will likely be found by a court to lack the capacity to form a contract…making the contract potentially void.
OFFER
Every contract must have what is considered a valid offer made to the offeree. In layperson’s terms an offer is simply a statement made by one party to another which clearly spells out the terms of the offer and which demonstrates a willingness to be bound by the terms of that offer.
ACCEPTANCE
Every contract must also contain acceptance of the offer. While this sounds like an obvious point, it is actually fairly complex. The contract should spell out that the offeree (the person to whom the offer is made) is (a) aware of the offer, (b) intends to accept the offer, (3) and that the acceptance that the offeree expresses mirrors the terms of the offer made by the offeror.
CONSIDERATION
Another fundamental aspect of a contract is the concept of consideration. A contract contains consideration where each party has agreed to do something in exchange for the other’s performance. For example, if a woman offers to sell her car to her friend, the woman is agreeing to give up her car in exchange for her friend’s payment for the value of that car. In this way, each party to the contract has given consideration and the contract itself should reflect that fact.
LEGALITY
It may go without saying, but a contract must be for a legal purpose. It is not unheard of, however, for one party to a contract to seek damages for breach of contract when the contract itself was for something illegal.
MUTUALITY
Under the concept of mutuality, all parties to the contract must be required to perform the contract obligations. In our previous example of the woman selling her car to her friend, if the woman were required to give up possession of the car to her friend, but the friend was able to pay the woman only if she felt like doing so, the contract could be viewed as invalid by the court.
Importance of Legal Concepts in Contract Negotiation
The concepts described above are not only essential to each contract to ensure the enforceability of the contract, it is in the negotiation stage of contract negotiation that an attorney is invaluable to ensure that these concepts are included or not otherwise lost by changes made to the contract. It is of further interest to be aware that certain keywords, phrases, and clauses should be included in a contract to produce the best possible protection for a client. An attorney competent in contract drafting can be an effective negotiator, knowing which contract phrases are key, and which can be altered or removed without invalidating or otherwise reducing benefits to the client under the contract.
DISCLAIMER:
The information provided in the pages and posts of this website are for general informational purposes only. The information presented on this site is not legal advice, and no attorney-client relationship is formed by the use of this site.
