Business-Minded Legal Solutions

Choosing the right contract type

Often, when you start a business, you work with more than just your clients. You work with other companies, too.

Although you may not have formal contracts with your customers, you may find yourself negotiating contracts to get the supplies and other services you need to sustain your business. It is essential to understand your contracts so that you can fulfill your obligations so that you know what to do if the other side fails to hold up their end of the bargain.

These are a few tips you should consider before your next contract negotiation.

Will this be long-term?

As you are negotiating your contracts, think about the future of your partnership with the other person or business. Certain types of contracts can benefit you and the other party if you know you will be working together on future deals, such as:

  • Fixed-price contracts
  • Supply contracts
  • Demand contracts

When you consider the anticipated duration of your business dealings, it can help you determine what aspects of your contact can be more negotiable. For example, some businesses are more willing to negotiate on price when they know they will do business again.

Have a clear understanding of the timeline

Your clients count on you to support them. If you do not have the supplies you need, you cannot provide for your customers.

When negotiating contracts, make sure you and the other party have reasonable timeframes for the deal and an understanding of what is at stake if there are delays. In some cases, if the other party knows what is on the line for you, they can understand why your need is a priority.

Making sure you start with the right type of contract could help you and the other party maintain a positive relationship for this contract and the next.