When do the negotiations really end?

I used to think that once the formal negotiations were concluded, the contracts signed, and any souvenirs of the “deal” exchanged, the “deal” was done. In fact, formal negotiations may have been concluded and agreements may have been committed to writing and signed, but in many cases the actual negotiations have 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 provide for all possible circumstances or situations that the parties may encounter during the term of their contract. Lawyers go to great lengths to provide contingencies in anticipation of change, which often adds to businessmen’s frustration, but something unforeseen will still come up 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 resolve the “unforeseen” problem. Doing so will not only help improve the working relationship, but will generally ensure that both parties benefit from the outcome in the long run.

The worst possible scenario is one in which one or more parties are executed to review the exact verbiage in the signed agreement every time a problem arises. This approach is a clear indication that the agreement may have been signed, but that one or more parties were not completely 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 pick something back up to “level the playing field.”

In each case, it is a clear indication that negotiations have not been concluded to the satisfaction of all parties involved and, if left unmodified, the likelihood of a successful long-term relationship is compromised. In fact, the relationship has likely been doomed from the moment the agreements 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 formal negotiations, we always presented a well-bound copy of the agreements to all parties involved to commemorate the “deal” and provide a reference document for the record. We have always hoped that no one would have to refer to the document to resolve a problem or face an unexpected change in circumstances affecting the business or relationship. Instead, we hoped that any unforeseen events could be dealt with outside of the agreements themselves, that the parties would “put their heads together” to the benefit of all involved.

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