Contract negotiation - Revision history

Designing Buildings at 10:36, 17 July 2024

2024-07-17T10:36:45Z

← Older revision		Revision as of 10:36, 17 July 2024
Line 53:		Line 53:
	* Willingness to concede or be flexible if necessary.		* Willingness to concede or be flexible if necessary.

−	= Related articles on Designing Buildings ~~Wiki~~ =	+	= Related articles on Designing Buildings =

	* Alternative dispute resolution.		* Alternative dispute resolution.
Line 67:		Line 67:
	* Contract v tort.		* Contract v tort.
	* Contracts under seal v under hand.		* Contracts under seal v under hand.
		+	* ESignatures.
	* Essentials of a contract.		* Essentials of a contract.
	* Form of tender.		* Form of tender.

193.227.187.90 at 11:50, 16 June 2021

2021-06-16T11:50:47Z

← Older revision		Revision as of 11:50, 16 June 2021
Line 1:		Line 1:
	Contract negotiation is the process of discussion between the parties to a contract to finalise the terms of the contract. Parties to construction contracts, may include clients, consultants, contractors, subcontractors and suppliers, and they will often have different, and sometimes conflicting, interests and in the form and content of the contract. Contract negotiation will usually involve some degree of compromise on both sides to achieve a final contract that is acceptable to all parties.		Contract negotiation is the process of discussion between the parties to a contract to finalise the terms of the contract. Parties to construction contracts, may include clients, consultants, contractors, subcontractors and suppliers, and they will often have different, and sometimes conflicting, interests and in the form and content of the contract. Contract negotiation will usually involve some degree of compromise on both sides to achieve a final contract that is acceptable to all parties.

−	Construction contracts will generally specify the cost, obligations of the parties and the programme for the works. As contracts are legally binding agreements, the terms of which can be enforced in the event of non-compliance by one of the parties, it is important that negotiations are thorough and detailed	+	Construction contracts will generally specify the cost, obligations of the parties and the programme for the works. As contracts are legally binding agreements, the terms of which can be enforced in the event of non-compliance by one of the parties, it is important that negotiations are thorough and detailed.

	Projects may succeed or fail as a direct result of the terms and conditions in the contract. Effective negotiation can help protect against time-consuming and costly claims and dispute resolution procedures.		Projects may succeed or fail as a direct result of the terms and conditions in the contract. Effective negotiation can help protect against time-consuming and costly claims and dispute resolution procedures.

Editor at 17:59, 22 September 2020

2020-09-22T17:59:00Z

← Older revision		Revision as of 17:59, 22 September 2020
Line 53:		Line 53:
	* Willingness to concede or be flexible if necessary.		* Willingness to concede or be flexible if necessary.

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Alternative dispute resolution.		* Alternative dispute resolution.
Line 74:		Line 72:
	* Negotiated contract.		* Negotiated contract.
	* Negotiation techniques.		* Negotiation techniques.
		+	* Pre-contract management.
	* Pre contract meeting.		* Pre contract meeting.
	* Sub-contract.		* Sub-contract.
Line 84:		Line 83:
	* [https://www.linkedin.com/pulse/effective-negotiation-construction-disputes-jack-rephan ‘Effective negotiation of construction disputes’] – Jack Rephan, LinkedIn.		* [https://www.linkedin.com/pulse/effective-negotiation-construction-disputes-jack-rephan ‘Effective negotiation of construction disputes’] – Jack Rephan, LinkedIn.

−	[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]	+	[[Category:DCN_Definition]] [[Category:DCN_Guidance]] [[Category:Appointments]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]

Editor at 12:31, 24 July 2018

2018-07-24T12:31:47Z

← Older revision		Revision as of 12:31, 24 July 2018
Line 66:		Line 66:
	* Contract documents.		* Contract documents.
	* Contract execution.		* Contract execution.
		+	* Contract strategy.
	* Contract v tort.		* Contract v tort.
	* Contracts under seal v under hand.		* Contracts under seal v under hand.

Editor at 15:23, 26 September 2017

2017-09-26T15:23:36Z

← Older revision		Revision as of 15:23, 26 September 2017
Line 77:		Line 77:
	* Tender evaluation.		* Tender evaluation.
	* Tender negotiations.		* Tender negotiations.
		+	* Zone of possible agreement.

	=== External resources ===		=== External resources ===

81.140.196.158 at 08:07, 17 June 2017

2017-06-17T08:07:48Z

← Older revision		Revision as of 08:07, 17 June 2017
Line 5:		Line 5:
	Projects may succeed or fail as a direct result of the terms and conditions in the contract. Effective negotiation can help protect against time-consuming and costly claims and dispute resolution procedures.		Projects may succeed or fail as a direct result of the terms and conditions in the contract. Effective negotiation can help protect against time-consuming and costly claims and dispute resolution procedures.

−	Some of the ~~key factors~~ of a contract that may require negotiation include:	+	Some of the elements of a contract that may require negotiation include:

	* The contract sum.		* The contract sum.

Editor at 14:52, 11 January 2017

2017-01-11T14:52:11Z

← Older revision		Revision as of 14:52, 11 January 2017
Line 59:		Line 59:
	* Alternative dispute resolution.		* Alternative dispute resolution.
	* Articles of agreement.		* Articles of agreement.
		+	* Bespoke construction contract.
	* Breach of contract.		* Breach of contract.
	* Construction contract.		* Construction contract.

Editor at 13:46, 20 December 2016

2016-12-20T13:46:23Z

← Older revision		Revision as of 13:46, 20 December 2016
Line 71:		Line 71:
	* Key dates.		* Key dates.
	* Negotiated contract.		* Negotiated contract.
		+	* Negotiation techniques.
	* Pre contract meeting.		* Pre contract meeting.
	* Sub-contract.		* Sub-contract.

Editor at 15:36, 20 July 2016

2016-07-20T15:36:09Z

← Older revision		Revision as of 15:36, 20 July 2016
Line 57:		Line 57:
	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===

−	* Alternative dispute resolution ~~ADR~~.	+	* Alternative dispute resolution.
	* Articles of agreement.		* Articles of agreement.
	* Breach of contract.		* Breach of contract.

Editor: Created page with "Contract negotiation is the process of discussion between the parties to a contract to finalise the terms of the contract. Parties to construction contracts, may include clients,..."

2016-07-20T15:35:58Z

Created page with "Contract negotiation is the process of discussion between the parties to a contract to finalise the terms of the contract. Parties to construction contracts, may include clients,..."

New page

Contract negotiation is the process of discussion between the parties to a contract to finalise the terms of the contract. Parties to construction contracts, may include clients, consultants, contractors, subcontractors and suppliers, and they will often have different, and sometimes conflicting, interests and in the form and content of the contract. Contract negotiation will usually involve some degree of compromise on both sides to achieve a final contract that is acceptable to all parties.

Construction contracts will generally specify the cost, obligations of the parties and the programme for the works. As contracts are legally binding agreements, the terms of which can be enforced in the event of non-compliance by one of the parties, it is important that negotiations are thorough and detailed

Projects may succeed or fail as a direct result of the terms and conditions in the contract. Effective negotiation can help protect against time-consuming and costly claims and dispute resolution procedures.

Some of the key factors of a contract that may require negotiation include:

* The contract sum.
* The start and finish dates.
* Flexibility to modify the building programme.
* Ability to claim extensions of time or damages.
* The time frame for payments.
* Insurance requirements, warranties and bonds.
* The scope of work and duties.
* Valuation of payments and variations.
* Testing and inspections.
* The use of subcontractors or subconsultants.
* Novation of consultants or consultant switch.

Preparation is a vital part of negotiation. It is crucial that the right people are taking part in the negotiation, and that they have full authority to reach agreement, otherwise is may be necessary to continually adjourn and reconvene whilst approval is sought. Where the negotiating parties are acting on behalf of someone else, they must be clear what the limit of their authority is.

Typically on construction contracts, the contract administrator co-ordinates negotiations with the preferred tenderer(s). Negotiations may be led at different stages by the cost consultant, contract administrator, lead designer, architect or by a client representative such as a project manager.

Methods for effective contract negotiation might include:

* Understanding the required elements of a valid contract.
* Understanding the objectives that need to be accomplished.
* Analysing all the negotiable terms to be included in the contract.
* Collecting documentation to support negotiation position. This includes tender submissions from other tenderers that can act as a basis for comparison.
* Creating a checklist of items to address during negotiations.
* Setting a timeframe within which to reach an agreement.
* Identifying where there might be leverage for flexibility or compromise on both sides.
* Identifying what a mutually satisfactory contract could be.
* Adjusting language and approach to mirror that of the other party in an effort at building trust – a technique known as ‘leveling’.
* Preparing a counter-offer to a draft contract.
* Knowing the cut-off point at which it is best to walk away from negotiations.
* Having an alternative contractor available in the event that negotiations fail. This can also put pressure on the contractor to reach agreement.

The record of the agreements reached needs to be carefully drafted and signed off by both parties as it will form part of the contract documents.

Typically, following the negotiation, the contract administrator will co-ordinate the preparation of a tender report. The client considers the tender report; and if necessary instructs changes to the tender documents (for example if the proposed price is too high). If instructed the contract administrator co-ordinates adjustments to tender documents and requests a revised tender from the preferred tenderer(s).

There are many attributes that are considered to be important for a skillful negotiator to possess. These may include:

* Having a good memory.
* Being persuasive and quick-minded.
* Able to ‘level’ and gain the trust of the other party.
* Good at handling stress.
* Efficient at preparing information.
* The ability to listen effectively.
* Good intuition in terms of being able to gauge the other party’s approach and opinion.
* Willingness to concede or be flexible if necessary.

= Find out more =

=== Related articles on Designing Buildings Wiki ===

* Alternative dispute resolution ADR.
* Articles of agreement.
* Breach of contract.
* Construction contract.
* Contract award.
* Contract conditions.
* Contract documents.
* Contract execution.
* Contract v tort.
* Contracts under seal v under hand.
* Essentials of a contract.
* Form of tender.
* Key dates.
* Negotiated contract.
* Pre contract meeting.
* Sub-contract.
* Tender evaluation.
* Tender negotiations.

=== External resources ===

* [https://www.linkedin.com/pulse/effective-negotiation-construction-disputes-jack-rephan ‘Effective negotiation of construction disputes’] – Jack Rephan, LinkedIn.

[[Category:Appointments]] [[Category:Client_procedures]] [[Category:Contracts_/_payment]] [[Category:Procurement]]