Negotiated Contract

A Negotiated Contract is a contract agreement that emerges from mutual negotiation processes (where contract parties actively shape the contract terms and contract conditions).

• AKA: Bargained-For Contract, Mutually-Developed Agreement.
• Context:
  • It can (typically) include Contract Negotiation Elements, such as:
    • Term Negotiation: Discussion and refinement of specific provisions
    • Party Position: Each party's interests and requirements
    • Negotiation Record: Documentation of the bargaining process
    • ...
  • It can (typically) follow Contract Negotiation Stages, such as:
    • Initial Stages, such as: position statement, term proposal, and counter-offer
    • Development Stages, such as: term discussion, compromise finding, and mutual adjustment
    • Finalization Stages, such as: agreement reaching, term documentation, and formal acceptance
    • ...
  • It can (often) follow Negotiated Contract Lifecycle Stages, such as:
    • Pre-Signature Negotiation Stages, such as: initial proposal, term negotiation, and final draft
    • Post-Signature Implementation Stages, such as: negotiated term execution, performance monitoring, and modification negotiation
    • Post-Completion Archive Stages, such as: negotiation record preservation, term analysis, and precedent documentation
    • ...
  • It can range from being a Pre-Signed Negotiated Contract to being an Active Signed Negotiated Contract to being an Inactive Signed Negotiated Contract, depending on the negotiated contract lifecycle stage and negotiation completion status.
  • It can range from being a Partially Negotiated Contract to being a Fully Negotiated Contract, depending on the negotiation scope and term customization level.
  • It can range from being a Simple Negotiated Contract to being a Complex Negotiated Contract, depending on the term complexity and negotiation depth.
  • It can range from being a Direct Negotiated Contract to being a Representative Negotiated Contract, depending on the negotiation method and party representation.
  • ...
• Example(s):
  • Negotiated Business Partnership Contracts, such as:
    • The Negotiated Microsoft-Activision Merger Contract (2022), resulting from 6 months of term negotiations
    • The Negotiated Time Warner-Turner Broadcasting Merger Agreement (1991), established through multi-party negotiations
    • The Negotiated Shell-BG Group Merger Contract (2015), developed through cross-jurisdictional negotiations
    • ...
  • Negotiated Employment Contracts, such as:
    • The Negotiated NFL-Players Association Contract (2019), produced through collective bargaining
    • The Negotiated Disney-Pixar Leadership Contract (2006), with customized executive terms
    • The Negotiated JPMorgan Chase CEO Contract (2005), with specially negotiated performance provisions
    • ...
  • Negotiated Commercial Contracts, such as:
    • The Negotiated Boeing-Airbus Supply Agreement (2018), with custom pricing terms
    • The Negotiated Amazon-Whole Foods Purchase Contract (2017), with mutually developed conditions
    • The Negotiated Netflix-Comcast Service Agreement (2014), with bargained technical specifications
    • ...
  • Negotiated Project Contracts, such as:
    • The Negotiated Channel Tunnel Construction Contract (1986), with multi-party terms
    • The Negotiated SpaceX-NASA Service Contract (2014), with custom safety provisions
    • The Negotiated Olympics Broadcasting Contract (2013), with bargained licensing terms
    • ...
  • ...
• Counter-Example(s):
  • a Standard Form Contract with fixed terms
  • an Adhesion Contract offered on take-it-or-leave-it basis
  • a Click-wrap Agreement without negotiation opportunity
  • a Government-Mandated Contract with prescribed terms
• See: Contract Negotiation, Bargaining Power, Term Customization, Contract Formation, Mutual Agreement.

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References

2024-11-29

• Perplexity.ai
  • Question: What are the key characteristics of a Negotiated Contract? Please explain how these contracts differ from standard form contracts, including their development process from initial negotiation through completion. Include information about different contract states (pre-signed, active, inactive), negotiation scope levels (partial to full), and complexity classifications (simple to complex). Also explain how the negotiation process shapes the final agreement terms.
  • Answer: A Negotiated Contract emerges through deliberate discussions between parties to reach mutually beneficial terms and conditions[1]. The process involves careful consideration of each party's interests, rights, and obligations to create a customized agreement.
    • Development Process:
      • Initial Phase: The process begins when parties identify the need for a contractual agreement and engage in preliminary discussions to express intentions and expectations[2]. During this stage, parties outline their basic requirements and establish a framework for negotiations.
      • Negotiation Stage: Parties deliberate over specific terms through:
        • Direct discussions of proposed terms
        • Exchange of contract drafts with suggested modifications
        • Comments and redlining of documents
        • Resolution of disagreements through compromise[1]
      • Finalization: The negotiation concludes when parties reach consensus on all terms, leading to contract signing and formal execution[2].
    • Contract States:
      • Pre-signature:
        • Contract Creation
        • Contract Negotiation and Collaboration
        • Contract Review and Approval[3]
      • Post-signature:
        • Contract Administration and Execution
        • Ongoing Contract Management
        • Contract Reporting and Tracking[3]
    • Negotiation Scope Levels: The extent of negotiation can vary based on contract complexity and party requirements:
      • Express Contracts: These involve explicit statements of terms and conditions, either written or verbal, with clear agreement between parties[5].
      • Implied Contracts: These form through party behavior and actions rather than explicit communication[5].
    • Complexity Classifications:
      • Simple Contracts:
        • Straightforward terms
        • Limited scope
        • Fewer negotiation points[7]
      • Complex Contracts:
        • Multiple interconnected terms
        • Extensive scope
        • Detailed negotiation requirements
        • May require legal expertise[7]
    • Impact on Final Agreement: The negotiation process shapes the final agreement by:
      • Ensuring mutual benefit for all parties
      • Clarifying expectations and responsibilities
      • Minimizing potential conflicts and misunderstandings
      • Creating customized solutions for specific business needs[6]
    • Critical Success Factors:
      • Clear identification of objectives and non-negotiable terms
      • Understanding of counterparty interests
      • Maintenance of positive, collaborative approach
      • Thorough research and preparation
      • Strategic concession-making[7]
  • Citations:

[1] https://juro.com/learn/contract-negotiation
[2] https://www.top.legal/en/knowledge/contract-negotiation-process
[3] https://www.contractsafe.com/blog/stages-contract-management
[4] https://www.acquisition.gov/far/part-31
[5] https://valetworks.com/what-are-the-classifications-of-contracts-valet-works/
[6] https://www.concord.app/guide/contract-negotiation/
[7] https://blog.signnow.com/contract-negotiation/
[8] https://www.evisort.com/blog/contract-negotiation-strategy-create-your-best-first-draft

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