An essential component of any comprehensive, well-drafted contract is effective negotiation. It is the responsibility of legal counsel to first understand the client’s objectives, and then negotiate the terms of an agreement that will uphold them. This is where the business law team of Capstone Legal Strategies steps in. Our firm has earned a reputation for skillfully negotiating enforceable contracts that protect the interests of our clients. Find out today how we can serve your organization.
Understanding the Value of Your Contracts
Contracts are not mere formalities that businesses must undergo to secure a deal or execute a transaction. Gone are the days when a handshake is sufficient to do business. Contracts have significant implications for the profitability, liability, and long-term success of a company. Unfortunately, far too many businesses fail to give their contracts the attention they deserve. The root of this problem can usually be traced to ineffectual negotiations.
Some companies skip the negotiation process altogether and opt instead for contract templates, but templates aren’t customized and may omit or disregard certain issues that are more important to your business. Dispensing with the negotiation stage can be costly. Form contracts are often not written with the minutiae of state contract law in mind. Worse, they are never written to the specific needs of the client, since by nature these documents are typically malleable to nearly any situation. The business client is left to select terms and clauses that may not advance its goals and could even undermine them.
In other situations, businesses negotiate their own contracts. Although this approach is certainly better than failing to negotiate at all, the client will likely be unable to evaluate its needs objectively. The resulting agreement may therefore include legally unenforceable terms and exclude language that is vital to the contract’s enforceability. This results in an overall poor deal for the client that could end up costing more money and exposing the business to potentially avoidable liability.
Ultimately, the client is left with a contract that is nearsighted and limited at best and detrimental to the client’s financial and legal health at worst. For that reason, Capstone Legal Strategies is dedicated to negotiating robust contracts for our clients.
Our Approach to Contract Negotiations
When a client retains our firm to handle their contract negotiations, we employ a multifaceted strategy that includes:
Evaluating the proposed deal or transaction
We usually start by meeting with the client to learn more about the underlying subject matter of the contract. This involves taking a look at what the client hopes to achieve and how the agreement will impact its bottom line.
Discussing necessary and desirable elements of the contract
It is imperative that the client understands the terms that make a contract enforceable. We also discuss what should be included to make the agreement more favorable to the client. Some possible examples of terms and clauses to include are those which cover (among other items):
- Company names, addresses, and other identifying information
- The subject matter of the contract
- Offer and acceptance
- Performance dates
- Defaults and breaches
- Prices and dollar amounts
- References to applicable laws and regulations
- Licensing terms, as necessary
- Arbitration and mediation clauses
- Force majeure clause
- Fees and penalties
- Warranties and representations
- Indemnification
- Enforceability
- Forum selection clause
Drafting the contract and reviewing proposed drafts
We can write the initial draft of the contract to facilitate negotiations with the other parties to the agreement. If the business has already received an initial draft from the other parties, then we will review it with the client’s rights and interests in mind and track changes made so that the client can send back to the other party. We also analyze all subsequent proposed drafts and provide insight into why certain terms may be retained or deleted.
Counseling the client
It is not enough to simply send the client a proposed draft from the other party’s lawyers and then ask for feedback. We aim to provide astute guidance to the client based on our experience with business and contract law. To that end, we ask the client questions, assess its answers, and sometimes conduct research where necessary.
Explaining and resolving limitations
There are both legal and practical hurdles to address in contract negotiations. For instance, a non-solicitation agreement must be carefully drafted to ensure it is enforceable in court. Meanwhile, we want a client to understand whether it can meet its contractual performance duties in light of business and economic realities. This is one specific aspect of how we advise the client and guide contract negotiations.
Conveying alternative terms and drafts to the other party
Often, the most appropriate negotiation strategy requires proposing options from which the other party may choose. By allowing the other party to select alternative terms and contract drafts, the client signals its intention to consummate the deal in a mutually beneficial manner.
Speaking or meeting with the other parties
More complex deals often necessitate extensive in-person or virtual meetings or phone conferences among the parties and their lawyers. We are prepared to negotiate by whatever means is required to finalize the agreement.
Conducting a final review and securing the signatures
Once the last draft is approved by all parties, our firm will conduct a final review of its clauses and terms, discuss the agreement with the client, and handle the logistics to obtain the necessary signatures to execute the contract. We are diligent in making sure the client understands its obligations, rights, and remedies under the agreement.
Types of Contracts We Negotiate On Behalf of Clients
Capstone Legal Strategies is ready to work out the details of your business agreement, no matter the size of your company or industry in which it operates. Some examples of contracts we typically negotiate for our clients are:
- Partnership agreements
- Commercial lease agreements
- Real estate purchase agreements
- Buy-sell agreements
- Service contracts
- Purchase orders
- Bills of sale
- Shareholder agreements
- Operating agreements
- Franchise agreements
- Non-compete, non-disclosure, and non-solicitation agreements
- Warranties
- Merger and acquisition agreements
- Employment agreements
- Joint Venture agreements
- Executive compensation agreements
- Independent contractor agreements
- Investment agreements (subscription agreements/private placement memorandums)
- Software development agreements
- Website terms and conditions
- IT service contracts
- Residential leases
- Construction contracts
- Property management agreements (including short term rental management)
- Loan agreements
- Equity agreements
- Promissory notes
- Talent agreements
- Music licensing contracts
- Publishing agreements
- Intellectual property licenses
- Prenuptial/Postnuptial agreements
Contact Our Houston Contract Negotiations Attorney
Capstone Legal Strategies is committed to providing sound legal representation to your business during each phase of contract negotiations. We approach every client’s contract needs with a focus on achieving the best possible agreement while reducing the likelihood of costly and potentially damaging litigation. To get started with our team, call us today.