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-ScriptUnit 2 Contract NegotiationPre-listening ActivitiesBusiness Contract Basics Important Points to Remember When Putting Together a ContractIf you spend enough time dealing with customers, you will at some point have to deal with the contracts related to the service you provide to those customers.At first, contracts can be intimidating, but like most things in life want to get a better practice, you will be better at dealing with these agreements. The following slides wont teach you to be a lawyer, but they will provide you some real world insights that will help you when it comes time to deal with the contract. You wont believe how many contracts I have seen come across my desk, but did not have the proper signatures. What I mean by the proper signatures is that the client who is getting the product or the service has signed the contract, and the person that is supplying that product or service has also sign the same contract. You have to have both signatures on the same document in order for it to be a contract. A lot of smart contracts now have this wording below the signature line: authority to bind the company. This wording serves as a reminder to the person who was actually signing the contract that they must have the authority to commit to the terms of the contract that they were about to sign. Basically the client by signing it says, yes, “I can pay for this product or service that Im about to receive”, and then subsequently the company representative is also saying, “Yes, I can deliver the product or the service as its outlined” in the contract. All contracts should have these basic elements:Number one: A start dateWhen are you going to deliver the product or the service? Number two: Contract lengthThis can be any duration of time from a day, a week, a month, seven months or even four years. Number three: Details of the product or serviceThis item can never have enough detail. The goal here is to make sure both parties know exactly what is to be done in the contract right down to the finest details. It is important to make sure everyones expectations are absolutely crystal clear. Number four: Prices Yes, it is important to list out the price you are charging for the service for the part that you are selling. Making sure that contract details what is included is just as important as to what is not included in the price. When you think price, think number of units, value, frequency and any and all discounts, and for how long that price will be in effect you may want to offer discounts are increases in your price if certain conditions apply such as a customer who buys more than expected or less than agreed to. Keep these options open because you never know what will happen in the future.Number five: Payment termsIn the old days when business was a local exchange of goods and services, payment terms are paid much cash when you bought or received the product or service. As business became more international, it became inconvenient to pay cash, for say, shipload of iron ore, so payment terms became part of the contract. Payment terms and sure there is a timely balance between the delivery of the service to the payment for such service. Some companies can afford to extend payment terms for bigger deals but some need to be paid immediately. When you are negotiating payment terms, ensure you can afford to terms you agree to, otherwise you may find yourself overextended credit wise and not be able to afford to pay your employees or other key providers.Number six: Mailing addresses.In your contract make sure you have the mailing addresses of that person who signed the contract and the mailing address and name of the person or department you were to send the invoices to. Same applies if youre getting paid make sure your customer knows where to send the checked, either way you will save a lot of time in minimizing confusion, if youre at this to the contract . Number seven: Approved signatures.Now were going over this again but this is simple. Make sure the people who signed the contract have the authority to commit to the terms of the contract when in doubt, ask for proof. Dont wrist disappointment or extra cost because you didnt do this step. When it comes to contracts and promises, the only valid promise is a promise that is written into the contract.While-listening ActivitiesVideo OneBusiness Contract Basics: Important Points to Remember When Putting Together a ContractEverything else is simple words, unspoken words are not binding, which they were, but that is not the case. So the contractors say we will pick up and dispose of all access material, get it in writing, if the client says we will give you more business, and if you deliver on time, have them put that in writing. It is easy to believe or have faith in the other party when youre negotiating a contract. You want to take their word for everyone who has good intentions, but situations change, people change. To ensure everyone remembers what they promised by putting it in writing and incorporating it into the contract. It is natural that a contract will call back and forth between your company and your client, is each party fine tunes what they will agree to and what they want change or adjusted in the contract. Electronically written contracts for document can be adjusted and or altered without the other party being told or being aware of it. Electronically written contracts or documents can be adjusted and or altered without the other party being told, or even being aware, you can get around redline in Word documents, like it or not, its a fact. So you have to guard against this practice by reviewing the redline contracts that come back to you. Most people will concentrate their attention on the sections that have been redlined, but it is always good practices to scan the rest of a document to ensure nothing else has changed. One quick and easy way to do this is to first ensure that you have the same number of pages in the contract. Secondly you can scan a contract by looking for the same words at the beginning and ends of each line, and comparing them to the original and the red-lined version. As you can see in this example the words any and against appear on the 3rd in eight lines as in the original, also we have ballpoint A through D in both copies, she can be pretty sure that this section on the contract has not been altered. If that section had words added or removed and the words were not line up the same way, this would be RBS with gas pressure fun changes as well.Every contract will have some changes made to it, when it does, both parties must agree to those changes. The changes need to be initiated by both parties or the change is not deemed accepted into the contract. This procedure also stops one party from making changes after the contract has been signed and ensures the integrity other contract process.It is a good idea to actually write such a clause into your contract to ensure that both parties understand that all changes have to be mutually agreed to. One would think this is an obvious lie, but reality has taught me quite differently. Here is a scenario to consider. John works for a software company and John gets paid a commission for each of his software sales. John knows the full price of this company software, but John also knows he can sell more software if he discounts the price John might not really know what it cost actually right cell and support the software his company is selling. All he knows is he gets paid if he sells. So Johns motivations may not align with his companys objectives.When it comes to discount some products or services, make sure everyone in your company knows what is the absolute lowest price that is acceptable, you run a business, not a charity. Dont give away the companys profits by adding excessive discounts into a contract. When you are negotiating a contract, always trying to keep in open mind new approaches and charms to a contract.It is natural to immediately dismiss any changes to your contract, but try and listen to new approaches in new ways looking at the business. Sometimes these new ideas will come from your client, and your customers, your best reaction is not to react, but to listen and ask questions, lots and lots of questions Try to understand where theyre coming from, if you let the other person explain their position, their logic and their reasons why they are asking for what they are asking, you might see an opportunity or approach that you never thought it before, always respond this way, “oh, all thats interesting”. “Why is that important to you and or your company? The worst contracts are the ones done in a rush. It is well known that most concessions and contracts are done in the final hours at the negotiation. Do what you can to avoid hurried time or sensitive situations such as signing a bunch of contracts on the last day of the month or at the end of the quarter. Try to minimize the straps by not setting a deadline to sign by a certain day or a certain time. Of course you will have to eventually sign the contract, but you can now predict ahead of time what issues will come up in the negotiation phase. So dont be at a disadvantage and leave yourself some extra time and flexibility. Contracts can impact businesses in many ways, unless you on run and manage a one-person business. Chances are very high that the contract youre about to sign will affect a lot of people in your company. People may be hired, expensive machinery purchased, office space is rented, and budgets changed, and so on. So now is the time to hand over your about-to-be signed contract to a trusted party in your company, or organization for them to have a review of the deal.They may have a perspective of our knowledge about a certain situation do you were not aware of. This information may have a material impact on the deal or simply point out something that might become an irritant later on. The point is that you wont (unless you get a second or a third opinion also). This gives other folks in the organization the ability to know and manage to the contract terms and that alone will ensure for successful contract.Thank you for watching this presentation on contract basics.I hope the information has been helpful to you.Video TwoHow to Negotiate a Contract: Negotiation Tips & TacticsIn this segment, were going to look at an overview negotiation in its entarity, if you want to think of negotiating as being a process of the curves between two or more people across the table. In fact its better to think of negotiating as entire members of the process. Now look at this map as you will see there are three distinct elements into negotiation. Pre negotiationWell, you need to get a mandate and you need to plan, so that you know what to do when you sit down with the other party. Phase two is the negotiation itself.It can last from half an hour, to an hour to a day, to a week, to a month. I was once involved in the gas negotiation between the British Gas Authority and Norway which last fourteen years, so there is no rule about how long a negotiation takes. Alright, lets go back to the final stages, which is an implementation.However good settlement is with the other party, however clear the contract, however many people have signed it, its value is only the extend to which its implemented. So that is a crucial area. So this is the management process. Lets have a look at phase one again, obtaining a mandate. Now you may have the authority to set your own mandate. Many managers and directors dont, they have to get permission from the board or from their boss. Some people seem to be better at getting a mandate than others, when they go and talk to somebody they come away with what they wanted, whereas most of us, we win some and loose some.Now I am interested in how it is that a few individuals seem constantly to get their own way. Second, planning. It would be ridiculous on a major negotiation to go and sit down with the other party without having thought through some of the issues and how to handle what it involves. Finally the face to face, this is what most people are interested in.How do you actually get what you want when sometimes it is in conflict with what the other party wants? We should be looking at that in some detail. And finally, implementations. Particularly how to avoid misunderstanding from the contract during the implementation phase.It happens. It happens a lot I have detail with it on many occasions. And how to get commitment from the other side to implementation even when unforeseen obstacles arise. So those are the three phases and theyre all interactive. These authorities, for example, some with an amazing tactical in the face to face that may give him sufficient reputation, I suppose you can say, with his director for them to give him the mandates he asks for. Somebody who is very good at getting a mandate may make the task of the negotiation easier. That person could be with someone who did not get a very good mandate and implementation is the area that very few people focus on obviously as I have said before thats key to ensure the value of the contract is realized by both parties.Video ThreeHow to Negotiate Effectively?Hi, this is DeCima, and I am back with a new lesson on how to negotiate effectively. Well, what is it to negotiate or what does negotiation really mean? Negotiation basically means an exchange of things between two people or two parties. So if I were to negotiate with you, I would be exchanging something that I have for something that you have, so for example, say, I have a car, I have a car but I dont have a lot of money. Now I am in need of money, but you are in need of a car. So what am I going to do? Im going to exchange my car in return for the money that you are willing to pay me for my car. So the talks that follow depending on whether we like to exchange the car for the money is what negotiating is all about. So negotiating, should I say, is making a deal.So if Im done with negotiating I have made a deal. Okay. Well, please note: that there are various steps to making a deal or negotiating effectively. The first one is: decide on your break-even point. What is a break-even point? A break-even point is basically the lowest amount, or shall I say, the cheapest price in non financial terms I would call it the worst case scenario. So when you are trying to exchange something that you have for something that someone else has, youve got to decide on what is the lowest amount, the cheapest price, or the worst-case scenario you are willing to accept before making a deal, or before saying yes Im willing to take that and give you this. So for example, you know, I may have say, 100 thousand dollars in my bank account what I dont have that much money, but suppose I do and I want to go and buy a house. Now Ive seen this really wonderful house, you know, with the really large living room, two nice bathrooms, a study in everything, and you know, the person who is selling me his house is willing to give it away, for say, one hundred thousand dollars. Now thats the exact amount I have in my bank account. Do you think and that is my break even point? I wouldnt say so. A break-even point is, as I said, the lowest amount or the cheapest price Im willing to accept to exchange what I have for something that I want. So you gotta be very careful about knowing what is your break even point, otherwise you might end up accepting a deal that is not in your best interests. The next point to negotiating or making a deal work in your favor is to know what you are worth. What does it mean to know what I am worth? Okay, you gotta two questions to yourself. Do I have something the other person needs? Question number two: does the person need me more then I need him? So when you know what is your worth, you are in a position to negotiate more effectively, so suppose I am a jewelry vendor, so I am trying to sell very rare diamonds, you know, say for example, or really rare pearls which you know are not very common in the market these days. Now does that mean put me in a position to bargain more effectively? To make a deal work in my favor? Yes, it does. Because now I have something that the person needs in fact the person who is buying something from me wants it more than I want to sell it and that puts me in a better position to negotiate more effectively. So when you are trying to negotiate a deal in your favor always, always, try to know what you are all about, what you are worth.Video FourChinese Negotiating Styles (1)Hi, Im Andrew Hubert, for china solved. Today were taking a look at the five Chinese negotiating styles or types. All negotiators, Chinese, Westerner or any other, fall into one of five categories, or types of negotiators, and that those five are competitive, compromising, accommodating or yielding, avoiding or collaborating. If youre interested in reading more about this topic, I refer you to G. Richard Shells Bargaining for Advantage. What Shell did was divided each negotiators style into two dimensions. uh. he looked at how important the goals of outcomes were to you and how important the counterparties uh. now comes and goes work to you. So if you look at the left side this is how you view the negotiation if you do you uh. the outcome of this negotiation as a top importance, you really want to maximize the value of this individual transaction. Maybe you have a unique asset, maybe you have a very strong bargaining position or maybe it was extremely confident about your abilities.Sometimes you take more of a moderate approach especially youre a professional salesman or professional purchaser and the value of this transaction is not tha

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