Negotiate contracts faster with contract negotiation software

Contract negotiation software aims to assist sales teams with flexible, in-depth collaboration features. Since each contract and its negotiations have their own ins and outs, it is essential to find a comprehensive, yet flexible, tool that streamlines the process of creating, reviewing, negotiating, and managing contracts.  

With the right software, organizations ensure compliance, enhance collaboration, and boost productivity that drives revenue growth. 

• What are the most common challenges in contract negotiations?

• Most negotiated contract terms and conditions

• 9 tips for best contract negotiation
• Get negotiated contracts faster

What are the most common challenges in contract negotiations? 

Contract negotiations often come with several challenges that can postpone an agreement or jeopardize the deal.

Deliver on various stakeholder expectations

A B2B contracting process typically involves up to six decision-makers, who each have their own expectations when it comes to negotiation outcomes and deliverables. Meanwhile, a G2 study from a few years back reported that, on average, close to eight people are involved on the seller’s side and close to six on the buyer’s side. Having a centralized contracting process is essential to walk a fine line between all stakeholders, regardless of their interests, location or chosen digital tools. Negotiation software enhances communication with flexible collaboration features and document version control, helping manage diverse viewpoints effectively.

Legal complications

Before signing, documents are still subject to changes from legal teams, especially if the contract exceeds a certain revenue limit. These late changes can slow down the process and disrupt negotiations.  

Finding a solution that benefits all parties is challenging, and clear communication between legal and sales teams is essential to resolving these issues. State-of-the-art negotiation software enables the creation of pre-made clause snippets that can minimize redlining, ensure consistency with company guidelines, and effectively manage diverse viewpoints, reducing legal involvement and the redlining rate.

Lack of visibility

Tracking contract creation manually often leads to version confusion, increased inefficiencies, and document creation complexity. When this process involves scanning, printing, wet signing, and relying on Word files in an online repository, personal drive or email for collaboration, it becomes even harder to track the status of contracts.  

These challenges cause compliance risks, collaboration issues, and a higher rate of human errors, which further hinder effective contract negotiations. There’s a clear need for tailored automated contract negotiation software to facilitate smoother contract management.  

By leveraging such software, businesses can ensure more efficient and effective negotiations, ultimately leading to better outcomes and stronger partnerships.

Most negotiated contract terms and conditions

When entering into a contract, several key terms and conditions often become the focal points of negotiation. Among these, payment terms, liability clauses, indemnification, and the scope of work (including key performance indicators, or KPIs) are frequently debated and meticulously detailed to ensure mutual understanding and agreement.   

The following section will explore the particulars of the most commonly negotiated contract clauses, providing sample clauses and insights into how contract negotiation software can aid in balancing the interests of all parties involved. 

Payment terms

Payment terms are regularly altered. Sellers often aim to secure the shortest possible payment period, typically around 30 days, while buyers generally benefit from payment terms that lay further in the future. The leverage in these negotiations usually lies with the party that has greater negotiating power. For example, larger companies might push for longer payment terms and small sellers will grudgingly oblige as to not lose out on the important deal.  

On the seller side, sales teams often negotiate the contract terms, relying on guidelines and pre-established policies to guide the payment clause discussions. However, these processes typically involve back-and-forth email communication and manual updates to pricing data in a CRM. This can be streamlined with automated pricing updates that sync with your contract templates, and a flexible negotiation environment that eliminates the need for constant email exchanges.  

Sample clauses:

Payment Terms: 

1. Invoice Submission: The Contractor shall submit an invoice to the Company within 30 days following the completion of the services rendered or delivery of goods. 
2. Payment Due: Payment shall be due 30 days from the date of the invoice, provided that the invoice is correct and complete. 
3. Late Payments: If any payment is not made by the due date, the Company shall pay interest on the overdue amount at the rate of 1.5% per month, or the maximum rate permitted by law, whichever is lower. 
4. Disputed Amounts: If the Company disputes any invoice, it shall notify the Contractor in writing within 15 days of receipt, providing details of the dispute. Both parties shall negotiate in good faith to resolve the dispute promptly. 
5. Currency: All payments shall be made in [Specify Currency].

Liability 

Negotiations around liability clauses often involve the legal department, as they need to ensure the terms are fair and protect the company’s interests.  

When negotiating liability clauses, a key concern is determining who is responsible if something goes wrong and what the liability cap will be. Typically, this involves extensive discussions about the maximum amount one party can be held liable for if found at fault. In some cases, there might be no cap on liability, meaning the responsible party must cover all damages  

Contract negotiation software streamlines the process by offering preapproved clauses with relevant laws (including jurisdiction) that minimizing the need for direct involvement from the legal department.   Additionally, when input from lawyers is required, they can be directly involved by adding them to the document workflows, allowing them to make all necessary edits and approvals promptly. 

Sample clauses: 

Liability: 

1. Limitation of Liability: Except in cases of gross negligence, willful misconduct, or fraud, neither party shall be liable to the other for any indirect, incidental, special, consequential, or punitive damages, including but not limited to loss of profits, revenue, or business, arising out of or in connection with this Agreement. 
2. Cap on Liability: The total liability of either party for any claim arising out of or in connection with this Agreement shall not exceed the total amount paid or payable by the Company to the Contractor under this Agreement during the 12 months preceding the event giving rise to the claim.

Indemnification 

Negotiating the indemnification clause is challenging because it involves determining the extent of liability and clearly defining each party’s responsibilities in the event of a dispute or loss. Common issues include disagreements over the cap on liability, the scope of covered actions, and the precise wording of indemnity terms. Negotiation software can ease these difficulties by providing standardized, customizable templates and automating updates so they comply with the prevailing legal standards. This helps reduce lengthy negotiations, ensures consistency and keeps all indemnification terms accurate and up to date. 

Sample clauses: 

Indemnification: 

1. Indemnification by Contractor: The Contractor shall indemnify, defend, and hold harmless the Company, its affiliates, and their respective officers, directors, employees, and agents from and against any and all claims, liabilities, damages, losses, and expenses, including reasonable attorneys’ fees, arising out of or in connection with any third-party claim alleging: a. Bodily injury or death caused by the Contractor’s negligence or willful misconduct. b. Damage to tangible personal property caused by the Contractor’s negligence or willful misconduct. c. The Contractor’s breach of any representation, warranty, or obligation under this Agreement. 
2. Indemnification by Company: The Company shall indemnify, defend, and hold harmless the Contractor, its affiliates, and their respective officers, directors, employees, and agents from and against any and all claims, liabilities, damages, losses, and expenses, including reasonable attorneys’ fees, arising out of or in connection with any third-party claim alleging: a. Bodily injury or death caused by the Company’s negligence or willful misconduct. b. Damage to tangible personal property caused by the Company’s negligence or willful misconduct. c. The Company’s breach of any representation, warranty, or obligation under this Agreement.

Scope of Work and KPIs 

When negotiating the scope of work and KPIs (if applicable), the main concerns revolve around clearly defining what the other party is delivering and what they are receiving in return. This includes the specific deliverables and ensuring that both parties have a mutual understanding of the expectations. Attention to detail is crucial to avoid any misunderstandings about what is being provided and the terms agreed upon.   

The software ensures that everyone involved — sales, legal, and operational teams —  is aligned. It also facilitates creating and approving the scope of work terms and KPIs, managing intricate details and ensuring all necessary approvals are obtained for high-value deals.  

By enabling consultation with the operational team and ensuring all necessary steps are completed by the set deadlines, the contract negotiation software helps streamline the entire creation process. This results in faster contract closures and a more organized approach to managing the scope of work and associated KPIs. 

Sample clauses: 

Scope of Work and Key Performance Indicators (KPIs): 

1. Scope of Work: The Contractor agrees to provide the services described in Exhibit A (the “Services”) in accordance with the terms and conditions of this Agreement. 
2. Key Performance Indicators: The Contractor shall meet the following KPIs to ensure the quality and timeliness of the Services: a. Timeliness: Complete all deliverables by the dates specified in the project timeline. b. Quality: Ensure that all deliverables meet the specifications and standards outlined in Exhibit B. c. Customer Satisfaction: Achieve a customer satisfaction rating of at least 90% based on the Company’s performance evaluations. 
3. Performance Monitoring: The Company shall have the right to monitor and evaluate the Contractor’s performance against the KPIs on a regular basis and shall provide feedback to the Contractor. 

Confidentiality and Data Protection 

Negotiating the data protection clause often involves ensuring compliance with the latest regulations and clarifying each party’s responsibilities and liabilities. Contract negotiation software streamlines this by providing up-to-date templates and guidelines, ensuring legal compliance and integrating with systems like Salesforce. This reduces the need for extensive legal reviews, speeds up the process and ensures that all data protection terms are accurate and compliant. 

Sample clauses: 

Confidentiality and Data Protection: 

1. Confidentiality: Each party agrees to keep confidential and not disclose to any third party any Confidential Information (as defined below) received from the other party, except as required by law or as necessary to perform its obligations under this Agreement. “Confidential Information” includes, but is not limited to, any business, technical, financial, or other information disclosed by one party to the other that is marked as confidential or that should reasonably be understood to be confidential given the nature of the information and the circumstances of disclosure. 
2. Data Protection: Both parties agree to comply with all applicable data protection and privacy laws and regulations in relation to the processing of personal data under this Agreement. 
3. Security Measures: The Contractor shall implement and maintain appropriate technical and organizational measures to protect personal data against unauthorized or unlawful processing, accidental loss, destruction, or damage. 
4. Breach Notification: In the event of a data breach involving personal data, the Contractor shall notify the Company without undue delay and provide reasonable assistance to the Company in complying with its legal obligations in relation to the breach. 
5. Return or Destruction of Data: Upon termination or expiration of this Agreement, the Contractor shall, at the Company’s option, return or destroy all personal data and Confidential Information in its possession or control. 

9 tips for best contract negotiation

Contracts are essential for business relationships, but manual document creation can lead to delays and frustration. Here are 9 tips to help you digitize your contract creation process and speed up negotiations.

1.  Assign the ownership of contracts to sales managers

Assigning a contract owner is crucial for several reasons. First, it ensures a single point of accountability. This helps manage teamwork effectively, especially with contracts involving multiple parties.   

Second, the contract owner can monitor all contract statuses, track progress, and ensure that each task is completed in a timely manner. Additionally, this role facilitates communication and coordination within and outside your CRM, making it easier to handle large teams and negotiable clauses.   

Using contract negotiation software allows sales managers to handle this role without needing a dedicated project manager. This improves contract management efficiency and ensures smoother execution of complex contracts. 

2.  Protect company data

Data security comes into play whenever you work on contracts – especially when you use third-party software.   

However, contract negotiation software can offer additional protection. For example, by managing the entire contract creation process with a single application, a single source of truth is created. This has the added benefit of simplifying the access control, complete with activity logs.  

And while some software stores the contracts within its cloud, others may store them to a secure company-specific repository and delete them altogether when finalized.  

Documill Leap does the latter and also collects the relevant Information Security Management System (ISMS) certificates to further ensure data privacy.

3.  Collaborate across teams

With contract negotiation software, different teams can edit a single file in parallel. Various teams can simultaneously collaborate on a single draft of the document, leaving comments both internally and externally and avoiding version confusion. Here, too, the software enables a single source of truth. 

4.  Keep edits visible

In contract negotiation software like Documill Leap, all changes that are made to a document are automatically tracked. These changes are highlighted in different colors and assigned to different contributors. This feature speeds up the review process and makes it easier to identify, who made which changes. It also ensures that no change goes unnoticed.  

After the final document version is approved and signed, all versions of the document are saved separately alongside the final document. A log file is also provided to record additional activities.

5.  Improve contract management  

Clear automated tracking of the document creation assists in analyzing current creation practices and suggesting future improvements for the next contracting process. A clear version history captures all types of changes and brings interactivity, allowing quick navigation through the document. This helps determine if certain terms should be frequently included in the future and reasons for possible disapproval or delays in approval.  

Additionally, a detailed audit trail is a key feature in contract management software. It’s crucial to know who approved what and when after the contract has been signed and shared. This helps identify bottlenecks, understand why certain stages took longer and improve future processes. It also assists in changing company guidelines or establishing new ones. 

6.  Automate contract workflows 

All documents are created following a set of tasks, orders, and rules. Since this process is unique for each company, finding the right tool to facilitate your established way of working can be challenging.   

Some solutions require involving a technical team to build the necessary workflow. However, no-code capabilities offer a valuable alternative. The no-code workflow builder, a feature which allows you to create various workflows for different contract types without technical expertise, is a valuable enabler in contract negotiation software like Documill Leap.

Learn how to set up your first document creation workflow now and make your sales team more efficient than ever. Try the free trial and see how easy it is.

7.  Speed up contract drafting with pre-approved templates

Pre-approved templates enable sales, procurement and HR teams to generate professional draft contracts swiftly without waiting for legal assistance. Conditional logic and flexible design options simplify the process, reducing the time required to create everyday contracts from days to minutes. 

8.  Save time with automated notifications, tasks and deadlines 

With contract negotiation software, there is no need to manually notify parties of their tasks or chase up on their statuses. Each collaborator is automatically notified when it is their turn to work on the documents. The software can integrate with the teams’ favorite tools, such as Slack for communication or email for notifications, to keep everybody informed of any changes.    

The software can track deadlines, send reminders, and provide real-time status updates, ensuring that all parties are on the same page and that no critical tasks are overlooked.

9.  Reduce costs and improve customer experience with e–signature

E-signatures increase efficiency in contract processing by reducing administrative costs associated with paper, printing, and shipping. They enhance customer accessibility and convenience, improving overall customer experience.   

 E-signatures extend business reach beyond regional boundaries while ensuring the integrity and legal validity of documents. In contract negotiation software like Documill Leap, these benefits are already built in.