Adapting to future needs.

When do the negotiations actually end?

I used to think that once the formal negotiations were concluded, the contracts signed, and any memories of the “deal” exchanged, the “deal” was done. In fact, the formal negotiations may have concluded and the agreements may have been committed to writing and signed, but in many cases the real negotiations have only just begun. In some cases this may result purely from a cultural norm, but more often than not it results from having to deal with real life situations.

The reality is that no agreement can anticipate every possible circumstance or situation that the parties may encounter during the term of their agreement. Lawyers go to great lengths to provide contingencies in anticipation of change, which often adds to the frustration of business owners, but something will still come up that was not anticipated at the negotiating table. The key to success is making sure the parties have a good enough working relationship to allow them to pool their combined “expertise” and solve the “unforeseen” problem. Doing so will not only help improve the working relationship, but will generally ensure that the parties benefit from the outcome in the long run.

The worst possible scenario is one where one or more parties run to review the exact verbiage in the signed agreement every time an issue arises. This approach is a clear indication that the agreement may have been signed, but one or more parties were not fully satisfied or comfortable with the final agreement. In fact, it may be an indication that one party feels they “left something on the table” and here is an opportunity to get something back to “level the playing field.”

In each case, it is a clear indication that the negotiations have not been concluded to the satisfaction of all parties involved and, if left untouched, the likelihood of a successful long-term relationship is compromised. In fact, the relationship has likely been doomed from the moment the deals were signed. Most likely, one of the parties will see the agreement as a mechanism to end the relationship and move on.

At the end of the formal negotiations, we always presented a neatly bound copy of the agreements to all parties involved to commemorate the “agreement” and provide a reference document for the record. We always hoped that no one would have to refer to the document to solve a problem or face an unexpected change in circumstances that affects the business or the relationship. Instead, we hoped that any unforeseen events could be dealt with outside of the agreements themselves, that the parties “put their heads together” to the benefit of all concerned.

Lesson learned: If you have to consult the contract to deal with a change or an unforeseen event, your relationship is already in trouble and the long-term prospects for your relationship are not very promising. It would be much more effective to resolve the problem by working together with affected parties to find a creative solution that satisfies everyone involved.

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