When Are the Negotiations Really Over?

I used to think that once the formal negotiations were concluded, the contracts signed, and any mementos of the “deal” exchanged, that the “deal” was done. In fact, the formal negotiations may have been concluded and the agreements may have been committed to writing and signed, but in many cases the real 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 anticipate every possible circumstance or situation that the parties may encounter during the term of their agreement. Lawyers do their best to provide contingencies in the agreements in anticipation of change– oftentimes adding to the frustration of the business people — but even so something will arise that was unforeseen at the negotiating table. The key to success is to ensure that the parties have a good enough working relationship to enable them to put their combined “expertise” together and resolve the “unforeseen” issue. Doing so will not only help to enhance the working relationship, but typically will ensure that the parties derive benefit from the outcome over the long term.

The worst possible scenario is one where one or more parties run to review the exact verbiage in the signed agreement each time an issue arises. This approach is a clear indication that the agreement may have been signed, but that one or more parties were not entirely satisfied or comfortable with the final agreement. In fact, it may be an indication that one party feels as though “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 of the involved parties, and left unchanged, the likelihood of a successful long term relationship is compromised. In fact, it is likely that the relationship has been doomed from the moment the agreements were signed. The agreement more than likely is being viewed by one party as a mechanism to terminate the relationship and move on.

At the conclusion of formal negotiations, we always presented a nicely bound copy of the agreements to all involved parties to commemorate the “deal” and to provide a reference document for the record. It always was our hope that no one would ever have to refer to the document to resolve an issue or to confront an unexpected change in circumstances affecting the business or the relationship. Instead, we hoped that any unforeseen event could be dealt with outside of the agreements themselves — that the parties would “put their heads together” to the benefit of everyone involved.

Lesson Learned: If you have to refer to the contract to deal with change or an unforeseen event, your relationship already is in trouble, and the long term outlook for your relationship is not very promising. It would be much more effective to resolve the issue by working together with the affected parties to come up with a creative solution that satisfies everyone involved.