How do you prioritize tasks when faced with abrupt modifications to the negotiated contract terms?

Analyzing the change is a crucial first step in that such impacts can go much further than the paragraph or provision it is modifying, and can influence everything from insurance and risk to sourcing materials and project closeout. A thorough understanding of not only the change to the contractual obligations but how that may impact the work (either in scope, sequencing, risk, or flow down requirements) will help evaluate the impacts in a broader sense and prepare you and your team for any delays, claims, or damages throughout life of the Project. I would add, that regardless of what industry you’re in, a strategy session with a Project Manager/Onsite Management can be invaluable in understanding the real implications of unexpected mods.

First, determine how the changes affect the overall project. Evaluate the modifications' potential benefits and drawbacks. Consider the immediate and long-term consequences. Prioritize tasks that address the most critical impacts first.

Here are the three most common causes of an abrupt and significant change in commercial transactions (there are others): 1) Change in customer business requirements. 2) Change in negotiation representatives. 3) Renegotiation of existing terms. “Contracts are never final until they are signed.”. A rule of thumb to remember. And a curse or blessing depending on which side of the deal you are on. A good contract negotiation is at all times forward moving and as linear as possible. When I am confronted with a course change by the other side, as much as I want to cling to indignance I know doing so is a losing strategy.

Go back to the starting line on contract terms is the best and ultimately the fastest approach to finalizing negotiation, especially if the negotiations have been non-linear, or the risk profile of the deal has significantly changed. You will probably face opposition in taking this approach from the other side creating the disruption and from your own stakeholders. Explain your reasons and soldier through it. You must avoid tripping over your agreement to prior terms. What may have been a barely acceptable set of disclaimers, indemnifications and limitations on liability can now spell the end of your company.

Open a dialogue with the other party to discuss the changes. Clarify any ambiguous terms or conditions. Negotiate new terms that align with both parties' interests. Prioritize tasks that facilitate effective communication and agreement.

If the terms and conditions you agreed to in negotiation are no longer acceptable under the changed deal or contract terms, inform the other party who proposed the changes. If the terms are still acceptable, you can make the identical revisions in your draft, reminding yourself that your identical revisions are not because you are under any obligation to preserve them. See the distinction?

If you are the party introducing the disruption to contract negotiations with new terms and conditions, the best way of presenting the new terms may sound counterintuitive to you. Don’t get too caught up in an explanation, subject to the rule of thumb that a contract is not final until signature, and another rule of contract negotiation, that of genuineness. I have changed my own revisions in contract negotiations with the simple explanation that I messed up. In high volume contracts environments and in negotiation of complex agreements mis-judgements will happen to even the best negotiators. Which leads us to another contract negotiation rule: What is written in the final agreement is what matters.

Agility and adaptability are key for business success. The faster you can shift, the easier and faster the deal can be closed. It can feel frustrating working on something that gets seemingly tossed otu the door, but in negotiations its always a great exercise to learn from for next time. Odds are that issue or approach will appear again down the road and you'll already have done the leg work making it faster next time around.

When Francis Ford Coppola filmed Apocalypse Now he had cast Harvey Keitel as Captain Willard. Three weeks into production Coppola flew from the Philippines to Los Angeles and hired Martin Sheet to replace Keitel. The abrupt recasting of a main character in a grossly expensive movie production was shocking to Hollywood’s status quo. What became the final cut was a defining movie about America. Coppola had the courage to admit he had miscast the part.