ARTICLE

Contract negotiators have long traded redlines. Those drafts represent a party’s priorities and judgment applied to the specific transaction. But things have changed. We now have counterparties and clients who send us markups without any meaningful human input.

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MEME OF THE WEEK

Nothing builds trust in a new business relationship like sending me documents that I can't edit.

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CONTRACT TIP

This contract tip is about dealing with stalled negotiations.

You make changes to the contract, the other side reverses those changes and makes new edits, you reverse their edits and restore your own. Sometimes we reach that point that neither party is moving. It is a classic case of brinkmanship, with each attorney waiting it out to see who would blink first.

When we are making progress in a negotiation on the other provisions, I don't necessarily see a lot of back and forth on a single provision as a bad thing.

If we aren't making progress and don't have an easy resolution in sight, I often suggest that we defer any further discussion of the issue until the end. Then I'll put the disputed language or section in brackets with a note that it is on hold.

I find this approach often does the trick.

It takes the pressure off and allows us time to resolve other parts of the contract. With the other issues mostly resolved, it is a lot easier to settle the handful of difficult ones left. If a delay isn't an option, I may do the opposite and make it front and center. I'd set up a call with the other side to discuss that one provision. The key in these cases is to get past the wording and talk about each side's worries about risk and consequences. Then we brainstorm together on ways to address the concerns.

If we reach the end of the negotiation and still haven't decided, then I have that talk with the decision-maker on my side if I do not have the final say on it. I explain why I pushed back and what the risks are. Then that person makes the call.

Do you have an approach to stalled negotiations that you like to use?

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