This is a crucial component of how to do a deal. Always remember basic concepts and keep reverting to a macro view of your overall strategy so you can retain your bearings.
Deal negotiation skills are an art honed by experience. There is considerable flexibility in how a deal is documented and progressed.
The main aim in any deal, and any well-drafted legal document, should be clarity of the key terms:
- What is to be done?
- When is it to be performed or completed?
- How much is to be paid?
- When will it be paid?
- Who is liable if things go wrong?
Avoid Distractions and Stay Focused
Of course, many other issues must eventually be recorded and there’s no shortage of distracting issues.
Distractions are a trap that must be avoided. They will confuse you, waste time, baffle you or cause you to miss the important issues. Sometimes that is exactly what the other party wants. They devise ways to get you focused on side issues so you forget the main game. They may make a big issue over the cents to distract your attention away from the things that could cost you dollars.
Beware, this is a common tactic of experienced deal negotiators and you do not want to be their next meal. They may have you so caught up in rewording a minor contract clause.
Or they may start a kerfuffle. An unimportant issue that they eventually let you win – just to let you feel all conquering and infatuated with your own ego. Meanwhile, you neglect careful analysis of the really important contractual provisions – the areas where the value of the deal is genuinely determined.
Keep your bearing on where the money will be won or lost. Stay on course.
Simplicity is How to do a Deal
Make use of the deal building tools that have been proven to work.
A deal should be built to suit the particular transaction, its timetable and each party’s concerns. Interim documents can sometimes be bypassed or selectively used – just like selecting a particular item from a legal tool kit.
The only really mandatory document is the final detailed Agreement.
Keep the transaction simple and don’t let the other party bamboozle you with unnecessary complexity or with jargon and terminology.
Here is an outline of the main deal building tools such as a Deed of Confidentiality, Deed of Non-Disclosure, Deal Memo, Term Sheet, Heads of Agreement, Memorandum of Understanding or Letter of Intent.
Photo by paul bica
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