Strategy consulting
Reviewing contracts
Contracts mean different things to different people. Although the ultimate place for a contract is a court of law, it is extremely uncommon for them to get that far, especially for contracts between companies in different countries.
When entering into a legal agreement, it is important to consider whether the contractual terms you are negotiating are designed to “win” in court when there is a problem or to ensure that both parties understand their obligations and the mutual objectives of the parties before starting business together.
Over the years, I’ve seen more problems caused by contracts than solved by them. In order to avoid that sort of situation, it is important to ensure that the terms of the contract are both clear and accurately reflect how you intend the relationship with the other party to proceed.
After listening to what you hope to achieve with the contract, we review the contractual terms and their wording to ensure that there are no misunderstandings, the contract is both fair to all parties and realistic, and it is designed to lead to mutual profit for all involved. These are the basic conditions for a long-term business arrangement.
IP agreements
Many business partnerships with overseas corporations involve various types of intellectual property. These can include patents, trademarks, brand-names, and copyrighted materials.
Agreements which lay down the rules for these types of intellectual property should meet the following basic conditions.
1) Wording should be simple and concise
2) The objective of (reason for) the contract should be clear
3) The term (period) and territory (geographical area) should be clear
4) There should be no inconsistencies or contradictions in the calculation of royalties
5) No conditions that put your company at a disadvantage
6) Should be fair to all parties
7) A competent court (jurisdiction) should not be disadvantageous to your company
8) You should be able to terminate the agreement when you feel it necessary
9) You should not be at unfair disadvantage if the agreement is terminated
We can help you ensure that you are happy with the terms of the agreement before you enter into it.
Advice regarding negotiations
Even within one country where all parties share the same language, there are regional differences between north and south, east and west, city and countryside, etc. The differences extend to local dialects where the same expressions have different meanings, different cultural biases, or a different emotional importance.
It is no surprise that the same applies when dealing with people from other countries.
Even though there will be differences between the various parties, it is always better to concentrate on the things you have in common. If you didn’t have things in common, you wouldn’t be negotiating, and it is these similarities that brought you together in the first place on which you should focus.
When negotiating with people from other countries, the customs, common sense, and way of thinking of each party will always influence the outcome. Furthermore, it is often necessary for at least one party to be negotiating in a second language.
Why it is obviously important to keep your goals in mind, it is equally important to understand the situation the person is in and what is important to them. By understanding the other party and their priorities, you can help negotiations proceed smoothly and increase the probability of achieving your goals.
Both parties need to understand the payment conditions, scope of any guarantees, and how problems will be dealt with if they should arise.
We can help you look at the big picture keeping the following in mind.
1. The position and goals of both parties
2. Maximizing your profit without exposing the other party to unnecessary risks
3. Establishing terms that will enable a mutually profitable and long-term relationship
Communicating across borders
Business negotiations are generally seen as a commercial act between two or more corporations. However, if you are sitting across the table with a representative of a major company, it is important to remember that you’re talking to a person.
In many cases, it is as important to consider the priorities and position of the individual with whom you are talking as it is to consider the priorities of the company they are representing. All deals are made between people.
Although it is rare for people to openly express themselves and say what they are truly thinking when the negotiations begin, they often begin to relax and speak more openly as time goes by if you’re able to create an environment of trust. It is this feeling of trust that is necessary for productive negotiations to commence. It is important to understand the other person and open up to them, so that you can earn their trust and help them open up to you.
By understanding the background, culture and expectations of the other person, it is easier to quickly improve the atmosphere of the negotiation as well as the chances of a successful outcome.
There is no guarantee that your idea of “common sense” is the same as that of the other person. The more you understand the other person’s perspective and honestly explain your own, the more you increase the probability of reaching a mutually-profitable agreement.
Everybody from the CEO and sales managers to the recent graduates that have just joined your staff are all representatives of your company. The language they use when contacting customers or suppliers greatly influences the impression of the entire company. When writing emails, making telephone calls, visiting factories, or attending meetings, the language used should be suitable for the occasion and easy to understand.
As it is very common for English to not be the first language of at least one person, it is important to keep vocabulary and expressions as simple as possible.
We can help you with language suitable for various situations.