What Is Contract Negotiation?

Contract negotiation refers to all other parties except the party to the contract. Generally, it includes the following negotiable content, the details of the cooperation to be discussed, the rights and obligations of all contract participants, and the handling of breach of contract

Contract negotiation

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Contract negotiation refers to all parties involved in the contract except the party. Generally, it includes the following items that must be clearly negotiated.

The dictionary's interpretation of the negotiation is that the parties concerned inform or negotiate with each other to find a solution to a major problem, or discuss a certain degree of consensus or compromise on the behavior or process.
Neil Rumberg, president of the American Negotiation Society, defined the negotiation in his famous book "The Art of Negotiations" in 1968: "As long as people exchange views in order to change their relationship, or seek consensus and negotiation for some purpose, Is negotiation. " He believes that a successful negotiation is a limited winner for each party. He sees negotiations as a "cooperative egoistic" process.
British negotiator Marsh has long been engaged in the study of negotiation strategies and the mathematical and economic analysis methods of negotiations. He defined the negotiation in the "Contract Negotiation Manual" in 1971: "The so-called negotiation means that the parties concerned, for their own purposes, consult in a matter involving the interests of all parties and adjust their respective The conditions put forward ultimately lead to a process of continuous coordination in which a mutually satisfactory agreement is reached. " According to Marsh, the entire negotiation is a "process."
Howard Raiffa, director of the Harvard Negotiation Training Center and director of the Institute for International Analysis of Issues, does not advocate a precise definition of negotiation. He believes that negotiation is both artistic and scientific. For some concepts of negotiation, only It needs to be roughly framed before the blur appears scientific. Before people have a lack of a thorough and systematic understanding of the field of negotiation, it is easy to restrict the development and improvement of the theory of negotiation too early and clearly define certain concepts of negotiation. Refa thinks the negotiations are scientific,
Refers to a "systematic analysis" of the issues to be resolved in the negotiation; artistry refers to social skills, the ability to trust others, persuade others and be trusted by others, the ability to cleverly apply various negotiation methods, and know when and How to use these abilities in wisdom.
Since human beings have social contacts, there has been negotiation, and negotiation has a long history. Negotiation is both a science and an art. It brings together the knowledge of various disciplines such as military, diplomacy, politics, economics, law, science and technology, trade, management, literature, art, speech, psychology and other disciplines into its own discipline-negotiation.

(l) Negotiation is human behavior. The nature of the person negotiating can be both a motive force and a resistance for the negotiating parties.
(2) Negotiation is the act of meeting needs and gaining benefits. However, the needs of either party to the negotiation must be met from cooperation with the other party or from some behavior promised by the other party.
(3) Negotiation is the communication between people. The satisfaction of the negotiating parties is achieved through mutual communication. The communication between the negotiating parties includes two aspects: interest communication and information communication. Interest communication, that is, to reach an agreement to find the interests or complementarity of the interests of both parties, is the purpose and essence of the negotiation. Interest communication must be based on information communication. It is very difficult to communicate with each other. One of the obstacles is that the status and environment of the parties to the negotiations are different, so the perspectives and methods of looking at the issues are different. The key to removing this obstacle is to collect information comprehensively, analyze facts objectively, and observe and think from the perspective of the other side.

(l) The principle of objectivity requires negotiators to comprehensively collect information materials; to objectively analyze information materials; to seek objective standards, such as legal regulations, international practices, etc .; not to submit to pressure, and only to obey facts and truth. (2) The principle of seeking common ground while reserving differences is based on the premise that the needs and interests of the parties are different, but the purpose of the negotiations is not to widen differences, but to bridge differences and make all parties partners seeking common interests and solving problems. (3) The principle of fair competition Negotiation is to seek consensus and requires cooperation, but cooperation does not exclude competition. To achieve fair competition, first, all parties must be equal in status; second, standards must be fair. This criterion should not be judged on the basis of the criteria identified by one party, but on the criteria agreed by all parties. Third, it gives people the opportunity to choose, that is, to select the best scheme from the many schemes proposed by them-to the greatest extent possible. All parties need a plan that cannot be negotiated without choice. Fourth, the agreement is fair. Neil Rumberg believes that "the basic philosophy of successful negotiations is that each side is the winner", which is what we call today a "win-win". Only a fair agreement can guarantee the true performance of the agreement. Unequal agreements reached under power are not lastingly binding. (4) The principle of compromise and complementarity The so-called compromise is to avoid conflicts or disputes with concessions. However, compromise is not the goal, but the pursuit of complementary interests. There will be many deadlocks in the negotiations, and only some kind of compromise can break the deadlock and allow the negotiations to continue until the agreement is reached. As for compromise, there is a distinction between fundamental compromise and non-fundamental compromise. The interests of the parties to the negotiation are not single. This is reflected in the multiple clauses of the negotiation plan. Some of the main clauses must be determined and must not be abandoned. Compromises can only be reflected in terms of non-fundamental interests. Sometimes, even if the negotiations break down It is also worth it, because compensation for non-fundamental benefits at this time is not enough to make up for the fundamental losses. Therefore, before negotiations, all parties must clarify their fundamental interests. (5) The principle of negotiating according to law. Negotiations between countries must be based on international law and international practice. Domestic business negotiations should naturally comply with China's relevant laws and regulations.

The negotiations before the award are mainly conducted in two aspects: technical negotiations (also called technical defense) and economic negotiations (mainly price issues). In international bidding activities, sometimes bidders are allowed to ask for price reductions in the negotiations before the bid is awarded; in the bidding activities using World Bank loan projects and domestic projects in China, it is not allowed to lower the bidding price after the bid is opened, but in terms of payment and payment period , Loans and interest rates, and foreign exchange ratios are negotiable.
Negotiations before the bid award are completed on the bidder's side through the bid evaluation committee. The objectives to be achieved at this stage of negotiation are as follows: First, in terms of the bidders, the first is to further understand and review whether the technical schemes and measures of the candidate bidders are reasonable, advanced, and reliable, and whether the forces ready to invest are strong enough to ensure quality and progress. The second is to further review the quotation and obtain the promise of the candidate bidder in terms of payment terms, payment terms and other preferential conditions. In terms of candidate bidders, they strive to make themselves successful bidders and sign contracts on as favorable terms as possible. At the same time, the candidate bidding unit can also inquire the bidder's intentions and make their choices to promise preferential conditions that do not involve changes in the substantive content of the bidding documents, enhance their competitiveness, and win the final bid.
The purpose of the negotiations after the award is to concreteize and organize the agreements reached by the two parties before this, to legally verify all contract terms, and to complete the final preparations for signing the contract agreement. Generally speaking, the negotiations after the award will involve all the commercial and technical terms of the contract. The following are the main contents that may be involved:
(l) Confirmation of the content and scope of the contract;
(2) technical requirements, technical specifications and technical solutions;
(3) price adjustment clauses;
(4) Method of payment of contract money;
(5) construction period and maintenance period;
(6) Settlement of disputes;
(7) Other issues related to improving the terms of the contract.
Of course, during the performance of the contract, differences or disputes may also form a situation of negotiation between the two parties, but generally, at this time, the contract has been formed, and the problems to be resolved are often partial or non-fundamental. Explain or use third-party power to resolve.