Contract Negotiation 101

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Georgina is a professional writer based near Melbourne, Australia. Over the coming weeks, she’ll be sharing her tips and experience from working as a freelancer.

lilcontractHow good are you at contract negotiation? When they get a contract, many freelancers I know just sign it, regardless of whether they’re happy with its terms or not.

They’ve usually spent a long time getting to contract stage, they might already be discussing deadlines (and hesitant to waste time trying to wring better terms out of the client), and they may see “disagreeing” with the client over the contract terms as likely to create a negative impression at the very beginning of the job.

But the contract you sign underpins the whole job. The contracting process deserves to be treated with care and taken seriously. You need to be thorough. And you need to be happy with the outcome. Here’s the process I use to assess work contracts.

Treat the contract as a first offer

It’s easy to see a contract that the client has drawn up as their “offer,” but this perspective limits your ability to negotiate. Why not see the contract as their “first offer?” That gives you room to maneuver or question on any points you’re not 100% happy with.

Once you’ve adopted this mindset, you can start reading with objectivity. I usually get out a pen and paper as I go through a contract, so that I can take notes about anything I don’t understand or that I need to question.

Read it from go to woah

Legalese doesn’t make for the most scintillating reading, but no matter how boring it seems, you must read the contract from beginning to end.

If you’ve discussed the job, its deadlines, deliverables, and payment schedule, with your client, the first thing you’ll want to do is make sure that those agreements are detailed in the contract, and that you’re happy with what’s there. If something you’ve discussed isn’t in the contract, or some of the details don’t reflect what you thought you’d discussed, make a note of them. You’ll want to discuss those with your client.

As you read, look out for unintelligible language, contradictions (these can often arise as standard or basic contracts are reworked and amended over time), and anything that looks odd to you.

Believe it or not, this process can be quite rewarding. Just as you turn page 15 and feel like you’re about to drift off to sleep, you come across some weird anomaly that makes you legally responsible for some part of the project you have no control over, and the time you’ve put into reading the contract begins to seem very worthwhile.

As you read, make note of any anomalies, as well as anything you need clarification on. Don’t be shy about confirming the finer details of your contract with the client — it’s better to be safe than sorry.

What’s fair?

Once you’ve read your contract, you’ll have a good idea of whether you’re happy with it, or whether there are areas you’d like to revise with your client. But there may also be some points you’re not sure of. If you find you’re questioning the fairness of some aspects of the contract, trust your gut. Don’t ignore your unease — talk to someone about it.

A mentor, trusted peer, or legal adviser may be able to tell you if a given clause is standard or seems unreasonable. If you want advice you can rely on, though, seek professional expertise — don’t rely on a friend’s recommendations when it comes to the legalities of your work.

Of course, not every clause needs to be wrangled over — you may well have minor quibbles over the fairness of certain terms that you’re happy to iron out with the client yourself.

The negotiation

Okay, so you’ve got your list of issues. Before you discuss these with the client, consider what your ideal outcome would be for each item. Then identify the minimum compromise you’ll accept. You may be willing to bend completely on some points so long as other requirements are met; you may not. But you need to identify your limits before you discuss the points of contention, so that you don’t end up coming out of a negotiation dissatisfied.

Although I’m usually nervous about contract discussions with clients, I can’t think of a time when the client wasn’t keen to find a solution that suited us both. If someone’s interested in working with you on a project, they’re usually going to be keen to come to an agreement that everyone’s happy with, although of course there may be some points on which they must remain inflexible due, for example, to corporate policy.

As an example, one client of mine paid on a 90-day cycle. The organisation was a major bank, and I just had to accept the payment terms as they were.

The important thing to remember is that the contract you’re offered shouldn’t be treated as a done deal. The draft contract is your opportunity to ensure that both parties to the agreement are comfortable with the terms of that agreement, and that you and your client really are on the same page.

How do you fare with contract negotiation? Do you have any contracting tips or experiences you can share?

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  • Ryvon Designs

    Quite often, during initial discussion with the client, I try to be the one to offer the first contract draft for review. I mention that design has many areas or clauses specific to the field, and that this route will help to save possible legal draft-writing fees for them, as well as help us get their project off the ground and running more quickly.

    I have found this hugely beneficial for both parties. It opens the floor for negotiations since I indicate I will provide a “draft” for their legal review, I have a chance to include all my field-specific clauses, things move forward more quickly (the majority of the time) and more often than not – the client is relieved to only have the job of reviewing, not drafting and writing.

    After the draft, of course, ALL of your points are touched on. With emphasis on coming to a final contract that both parties have had a say in and are content if not completely pleased with.

    Great post!

    Pam Tallon
    Ryvon Designs

  • Giancarlo Colfer

    Interestingly enough, it’s sometimes the Freelancers writing up a contract. No 15 page contract :) but something that’s just right :) – Let’s get an article on pointers to build a contract for Professional Freelancers.