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Your Contract is as “Good as New”

Randy Kutz
230626 Your Contract Is As Good As New
© Scotwork NA

My young granddaughter recently approached me with a sad look while clutching something to her chest. I asked her what was wrong, and she opened her hands to show me. Spread out in her tiny palms was a special keepsake broken into three pieces.

As any “fix-it” Papa (it’s what my grandkids call me) would do, I assured her we could glue it back together, and it would be as “good as new.” While that stopped her tears, the reality of what “good as new” actually meant became evident: “renewed” was not “restored” to the way it once was. Hairline cracks were a reminder that it was still broken, even if the item was usable again.

Buyers and sellers dealing with a renewal face a similar challenge: Do they renew the contract as is even though there are damaged pieces, or do they seek changes to restore the agreement to the way it was intended to be? If things are going perfectly for both parties, then renewing with no changes would be completely acceptable. But we don’t live in a perfect world, and external factors disrupt, often resulting in one or both parties needing to restore what is at issue.

The choice for negotiators, however, is weighing the ease of renewing with no changes (when things are, in fact, damaged) against the risk of opening up the contract to fix what is broken but being pressed to make undesirable changes in other areas as well. Either choice can result in reduced contract value, sour the business relationship, or both. This can make contract-renewal season an anxiety-infused high-wire act for both parties.

So, how do you address the necessary issues in your contract renewal without falling off the wire?

First, deal with the important issues head-on and early on. Don’t delay and ignore them until the last minute. Problems rarely resolve themselves without intervention. If you know that elements of your contract are a pain point for either party, make sure that issue is addressed in the renewal — especially if the problem is being caused on your end. Best to work toward a remedy when you’re not under the pressure of the clock. If you wait until the 11th hour, you’re more likely to make unwise and unnecessary concessions to get the account renewed.

If both parties need to alter their positions, try to discover (or disclose) what across-the-board benefits would be derived from this change. Empowering each side with a solid understanding of the other side’s perspective creates opportunities to resolve the problem without costing either side more. Enlist both sides in helping to find a solution. Working together forges a spirit of partnership.

If you are in business relationships that matter, fix what is damaged. Glue does not mean new.

We Can Help You Navigate Contract Renewals.
Are you facing contract renewals with a lot of damaged pieces? Need to renew without a re-do? Draw on Scotwork’s nearly 50 years of real-world negotiating experience to get better deals, save time, and create value that preserves and strengthens relationships. Partner with one of our advisers to ensure you have the optimum view of your deal.

Talk to one of our experts today.

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