Effective Contract Negotiations

What Is Contract Management?

Do you feel that anyone without training can negotiate a contract well?
You would be losing a lot of money and energy if so.

Contracts govern your organization’s relationships with vendors, customers, partners, and employees. Effective contract management ensures these relationships are efficient and profitable so that your business benefits from every agreement and you get optimal financial returns.

To ensure your projects’ contracts are properly lay out and negotiated on a win-win basis, you want to learn how to strategically Negotiate All your Contracts!

It also ensures that the implementation or delivery of every contract, whether a legally binding written or oral agreement, is satisfactory to all parties. Efficient contract management includes agreeing to, documenting, and reporting on any changes from both buyers and sellers, so you face no disputes or surprises.

Besides, not only you negotiate with the marketplace but with internal departments e.g., Engineering, Production, Finance, and Safety functions. Unfortunately, such negotiation is often delegated to those least able to deliver an effective outcome. This failure impacts upon the whole organisation suffering in the profitability, increased business risk, personal stress and operational costs.

The participants are expected to compare their understanding of their capabilities against the key principles that support effective contract negotiations and to take away concepts and ideas that will benefit both their business and them personally.

This training seminar will highlight:

• All contract parts discussed and how to negotiate those terms.
• Importance of getting the right specification to reduce both cost and risk.
• Evaluating potential contracting parties
• The purpose of a contract / Legal needs / Terms and Conditions. Preventing contract failure. Discovering your personal negotiation capability
• Obstacles to good negotiation. Tools of the successful negotiator. Essential elements of negotiation and developing a personal action plan for improvement

At the end of this training seminar, you will learn to:

• Build an efficient and effective contract negotiating skill
• Communicate more effectively inside and outside of the organisation
• Understand your personal strengths and weaknesses
• Understand contract needs and eliminate contractual risks
• Plan and deliver a successful negotiation and negotiate with different cultures
• Have confidence in your ability to negotiate at all levels with all organisations

This training seminar benefits those who make policy as well as those whose role is to apply policy.  Status / Job title / Role in the Company is irrelevant. It is applicable to those new to contract negotiation as well as those experienced in the process.

This  training course is suitable to a wide range of professionals but will greatly benefit:

• Those who are new to contract negotiation
• Those with some years’ experience in contract negotiations but who wish to regenerate their thinking
• Those at all levels in projects / site contract management / engineering with supply chain involvement
• Those in a Company who influence the selection of materials/ services / source of supply
• Any person regardless of background or present role / position who wishes to understand the contract negotiation process

Module 1:The Unforgiving Law of Contracts

• Hidden Hazards
• Leveraging the Business Mind-set
• Perspectives and Caveats
• Contract elements for negotiations
• Authority to negotiate
• Consideration
• Defenses to Contract formation

Module 2   Guidelines for Negotiations and relevant documentation

• Promises versus Condition
• Rules of Interpretation -Vital in Negotiations
• The Battle of Forms – Which party’s terms will prevail?
• Implied Covenant of Good faith and Fair Dealing
• Letters of Intent and Oral Contracts – Terms to consider during Negotiations
• Contract Negotiations – Closing the deal Strategies
• Breach, Damages and Remedies – Benefits of Strong Remedies Language

Module 3:Common Mistakes In Contract Negotiations

• Performance before Agreement
• Negotiating RFPs
• Inadequate description of Performance Obligations
• Negotiation on Anticipated Performance Concerns
• Negotiating the problems on Critical Performance Concerns/Technical   Specifications/Service Level agreements
• Negotiating guidelines for Term and Termination
• Poor Vetting of Vendors and Suppliers contracts during negotiations
• Accepting standard form contracts
• Poor document change Tracking and Proofing

Module 4 : The Art of Negotiation

•   Negotiation Training
•   Demeanour and Attitude
•   Body Language
•   Negotiation Chips
•   Do not Negotiate against yourself
•   Conflicts of Interest
•   Protection of Confidential Information

Module 5:  Getting it clear in Negotiations

•   Clarity
•   Drafting Red Flags
•   Technical Details
•    Active Analysis
•    Draft Marking

Module 6: Common Contract Terms for Negotiation

•  Opening paragraphs/Recitals
•  Definition Sections -to be from day 1 of Negotiations
•  Obligations of Parties/Services
•  Pricing/Fees/Payments
•  Understanding Intellectual Property/Proprietary Rights clauses
•  Remedies and Exclusion of Liability
•  Representations and Warranties

Module 7: Negotiating Risk and Liability clauses

• Disclaimers/Warranty – Negotiate as cap to liability
• Limitations/Limitation of Liability – Negotiate degrees of Negligence
• Guidelines on how to negotiate liability Caps
• Insurance
• Modification and Waiver
• Inappropriate Force Majeure Triggers
• Assignment and Novation
• Entire Agreement/Integration/Merger – Has all issues negotiated included?
• Managing Performance Problems in Negotiation
• Governing Law/Jurisdiction

Module 8: Amendments and Addendums

• Changing Circumstances
• How to draft negotiated Terms -Clarity /Completeness
• Addendums
• Amendments -Contract Surgery
• Tactical considerations
• Too many amendments
• Cats in Trees
• Sand Traps
• Code Red -Zero Sum Disputes

There will be a workshop on the negotiation of clauses. The seminar will involve discussions, presentations and individual question and answer sessions.

K. PATHMANATHAN
LL.B (Hons) London, CLP - Malaysia

K.Pathmanathan, who holds an LL.B (Hons) London, CLP – Malaysia, has been actively involved in the field of education, management and training. He has more than twenty-five years of professional experience as a trainer and principal consultant in various legal areas, including Commercial Contracts, Data Protection, Sexual Harassment, Debt Recovery and now Corporate Liability on Corruption.

Industrial Experience
• Trained and lectured for private companies and government entities Participants made up of managers, CEOs, CFOs, corporate and government support staff, executives, supervisors and staff of all levels.
• Conducted legal and management seminars for organizations which included providing consultation.
• He has taught in many Government-sponsored programs conducted by the FMM, such as the Entrepreneur Development Skills program and also for numerous NGOs.

Benefits of Mr.Pathmanathan as Your Trainer
He is able to combine the elements taught in a specific program both legal and management with real life requirements for those on the job.

• Mr. Pathmanathan is a hands-on, bilingual trainer who graduated with LL.B (Hons) from theUniversity of London in 1986 and the Certificate In Legal Practice (Mal) in 1987.
• He has excellent classroom management skills and is able to bring out the extrovert in participants resulting in in-depth lasting results.
• He is the pioneer trainer for some legal programs in Malaysia such as the Contract Management program.
• He takes part in seminars and conferences which touch on the latest developments in Malaysia and globally.
• Mr Pathma is extremely proficient in the subject matter that he trains on and well sought after by the corporate sector.

Participants have found his training programs interesting, highly effective, and practical for their daily duties. These have been manifested in the post-training evaluation reports and the strong recommendation by participants for others to attend Mr. Pathma’s programs. He has a personal commitment to helping individuals and organizations to achieve their highest potential and vision. His clients are mostly from the petrochemical industries, manufacturing sectors, banking, telecommunications, consumer products, and services industries namely big corporate companies such as Petronas, PSMB, Tenaga Nasional, Jabatan Air, Telekom, TM Touch, Hitachi, Tioxide(M) Sdn. Bhd., Ambank, Affin Bank, Bank Rakyat, Nippon Oil Exploration, Hewlett Packard, Penang Port, Penang Bridge Sdn Bhd, Measat Broadcasting Network Systems, Sony, Infineon Technologies, STEC, Wong Engineering, Silterra, Teknik Janakuasa, B Braun, Bax Global, Transocean Malaysia, Harbour Board – Sarawak, Silitek Corporation, Mattel (M), United Sweethearts Garment, Yan Jin (M), BAX Global, Circle Freight, Kintetsu Air Services, Bayview Beach Resort, Cititel Penang, Evergreen Laurel Hotel, DIC Compounds, Sitt Tatt Co, Tim Electronics, Petronas Fertilizer (Kedah) and its subsidiaries, Fed Ex, GD Express, H. K. Lamtech, Advance Sound Products, Paramount Engineering, Motosikal & Enjin Nasional Berhad (Modenas), Yamaha and Sime Tyres International to name a few. Participation from the Government sectors include those from the Land Department, Risda, Felda, Lembaga Hasil Dalam Negeri, Tentera Laut Diraja Malaysia, Jabatan Kesihatan PP, Customs Department, Local Councils and other government agencies. Mr. Pathmanathan is a hands-on, bilingual trainer who graduated with LL.B (Hons) from the University of London in 1986 and the CLP (Mal) in 1987.

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