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Negotiating Contracts for Maximum Value and Minimum Risk

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This session focuses upon the commercial relationship negotiation interface.  You will learn how to become an effective negotiator in the context of a commercial contracting – you will realize that negotiation is not merely an event, but rather an inter-related phase in a larger process.  When should you negotiate?  How can you best prepare for negotiations with commercial partners?  Why are internal negotiations with stakeholders sometimes tougher than negotiating with external commercial partners?  These are just some of the questions we will address in this session.

Your Benefits of Attending:

  • Understand the impact of power curves in negotiations and why that is so important.
  • Realize the importance and impact of negotiating before and after partner selection.
  • Develop effective negotiation strategies for your commercial contracts.
  • Assign effective roles to negotiation team members.
  • Learn effective negotiation tips and techniques.
  • Acquire hands on negotiation experience in a commercial contract.
  • Create negotiation strategies that enable greater value and risk positions.
  • Identify negotiation tools that are needed for negotiation success.

Join Jim Bergman and take your negotiation strategies to the next level.

  1. Introduction 00:01:28
  2. Key Benefits 00:02:27
  3. Topics 00:02:56
  4. What is Negotiation? 00:05:45
  5. Allocating Risk 00:07:20
  6. The Results V. Resources Decision 00:08:27
  7. Clock Diagram 00:14:57
  8. A Key Consideration 00:17:37
  9. Defining Viable/Effective Negotiation Tactics 00:25:50
  10. Does The Tactic Align With Broader Policies? 00:27:47
  11. The Golden Rule 00:30:02
  12. Document, Plan and Ratify Tactics 00:32:27
  13. Developing a Robust Negotiation Strategy Document 00:38:51
  14. Define The Strategic Intent/Outcome 00:40:34
  15. Determine The Appropriate Tactics/Counter-Tactics 00:41:41
  16. Resolve Positional/Principle Interest-Based Negotiation 00:42:16
  17. Pursuing a Positional Negotiation Approach 00:48:03
  18. Do We Have The Advantage or Disadvantage? 00:49:31
  19. Determine The Appropriate Tactics 00:57:40
  20. Develop Max/Target/Min Positions and Fallbacks 00:58:21
  21. Creating a Principle-Based Negotiation Strategy 01:01:08
  22. Win/Win 01:01:50
  23. Social Norms 01:03:42
  24. Tactics Include 01:09:33
  25. Establishing a Re-Negotiation Policy 01:11:15
  26. What Are We Re-Negotiating? 01:23:45
  27. Is Re-Negotiation In The Other Party’s Interest? 01:24:13
  28. Consider Short-Term and Long-Term Impact 01:24:34
  29. Mastering The Challenges of Internal Negotiations 01:25:33
  30. Asses Individual Objectives 01:28:50
  31. Align Conflicting Objectives 01:29:42
  32. Communication and Change Management Skills Are Vital 01:29:59
  33. Populating The Negotiation Tool Box 01:31:28
  34. Prioritized Wants 01:31:35
  35. RACI Chart For One’s Team/Stakeholders 01:32:48
  36. Financial Equivalent Concession Tracker 01:33:24
  37. Calculating Financial Equivalents 01:34:13
  38. What Is The Concession Worth To Me? 01:34:16
  39. What Is The Concession Worth To The Other Party 01:34:28
  40. Is There An Exchange of Value? 01:35:08
  41. Contracting Practitioners Must - Treat Negotiation  01:35:58
  42. Contracting Practitioners Must - Ensure Preparation 01:36:32
  43. Contracting Practitioners Must - Acquire a Portfolio 01:36:52
  44. How Does This Apply To Your Scenarios? 01:37:42
  45. Key Benefits - Understand Power Curves 01:37:48
  46. Key Benefits - Negotiating Before/After Partner Selection 01:38:18
  47. Key Benefits - Develop Effective Negotiation 01:38:20
  48. Key Benefits - Assign Effective Roles 01:39:14
  49. Key Benefits - Learn Effective Negotiation 01:39:35
  50. Key Benefits - Acquire Hands On Negotiation Experience 01:39:46
  51. Key Benefits - Create Negotiation Strategies 01:40:10
  52. Key Benefits - Identify Negotiation Tools 01:40:30
  53. Questions 01:40:33
  54. For Resources 01:42:21
  55. Thank You 01:42:23
  56. Presentation Closing 01:43:47


  • Jim Bergman

    Jim Bergman

    Jim is an experienced contracts attorney and procurement professional with international management consulting experience in the procurement field in the USA, UK, Europe, China, India, SE Asia, the Middle East, Africa and Australia. He has experience working in both the public and private sector on [...]

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ISM Credit

Institute of Supply Management

This program may be used for Continuing Education Hours (CEH) toward recertification for programs offered by the Institute for Supply Management®, including the Certified Professional in Supply Management® and Certified Professional in Supplier Diversity®.

ATAPU Credit

Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in purchasing.

ATATX Credit

Aurora Training Advantage is offering continuing education points designed to recognize dedication to training and excellence in accounting.
  • Concession 01:01:45, 01:33:31
  • Contract 00:01:48, 00:01:59, 00:02:01
  • Key Performance Indicators (KPI) 00:07:35
  • Negotiation 00:01:37, 00:01:42, 00:03:10, 00:03:30 
  • Procurement 00:23:31, 00:23:38
  • Risk Allocation 00:07:13, 00:07:23
  • Scopes Of Work (SOWs) 00:07:32
  • Service Level Agreement (SLA) 00:07:34
  • Stakeholders 00:05:05, 00:05:16
  • Supplier 00:01:51, 00:02:13, 00:10:01

Concession: Is a grant of rights, land, or property by a government, local authority, corporation, individual, or other legal entity.

Contract: A written or spoken agreement, especially one concerning employment, sales, or tenancy, that is intended to be enforceable by law.

Key Performance Indicator (KPI) : A Key Performance Indicator is a measurable value that demonstrates how effectively a company is achieving key business objectives. Organizations use KPIs at multiple levels to evaluate their success at reaching targets.

Negotiation: The trading deliberations which generally lead to the lowering of prices by the vendors.

Procurement: Procurement is the process of finding and agreeing to terms, and acquiring goods, services, or works from an external source, often via a tendering or competitive bidding process. Procurement is used to ensure the buyer receives goods, services, or works at the best possible price when aspects such as quality, quantity, time, and location are compared.

Risk Allocation: Risk allocation is the process of identifying risk and determining how and to what extent they should be shared. Most owners understand that risk is an inherent part of the construction process and cannot be eliminated.

Scope of Work (SOW): The Scope of Work (SOW) is the area in an agreement where the work to be performed is described. The SOW should contain any milestones, reports, deliverables, and end products that are expected to be provided by the performing party. The SOW should also contain a time line for all deliverables.

Service Level Agreements (SLA): A service level agreement (SLA) is a formal document that defines a working relationship between parties to a service contract.

Stakeholders: A stakeholder is a party that has an interest in a company and can either affect or be affected by the business. The primary stakeholders in a typical corporation are its investors, employees, customers and suppliers.

Supplier: A supplier is an entity that supplies goods and services to another organization. A supplier is usually a manufacturer or a distributor. A distributor buys goods from multiple manufacturers and sells them to its customers. Similar Terms. A supplier is also known as a vendor.

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Webinar Survey Overall Rating

This webinar received a total of 5 survey responses. Attendees have given an average rating of 4.4 stars out of a possible 5, reflecting the quality and value of the content presented.

Average rating

4.4 / 5
Webinar Presentation
How many of the objectives of the event were met?
4.6 Stars
How useful was the information presented at this event?
4.0 Stars
Overall, how satisfied were you with this event?
4.2 Stars
Speaker Performance
Overall, how satisfied were you with this presenter?
4.4 Stars
How closely did the presenter follow the schedule?
4.6 Stars

Reviews From Webinar Survey

Our webinars are crafted to deliver exceptional value and insight to business professionals. Below, you'll find genuine feedback from attendees.

Jackie J.
August 16, 2021
4.0 / 5
Webinar Rating:
4.0 Stars
Speaker Rating:
4.0 Stars
Do you have any other comments, questions or concerns?
It would have be nice to have documented examples of certain scenarios rather than just having the audio. The documents would serve as reference material at later dates.
Raquel A.
August 16, 2021
5.0 / 5
Webinar Rating:
5.0 Stars
Speaker Rating:
5.0 Stars
Do you have any other comments, questions or concerns?
excellent!
Diane H.
August 16, 2021
3.8 / 5
Webinar Rating:
3.3 Stars
Speaker Rating:
4.5 Stars
Do you have any other comments, questions or concerns?
no comment
Michelle T.
August 16, 2021
4.6 / 5
Webinar Rating:
4.7 Stars
Speaker Rating:
4.5 Stars
Do you have any other comments, questions or concerns?
Very well versed presenter. He was easy to follow and made great sense. Helpful!
Rachel V.
August 16, 2021
4.4 / 5
Webinar Rating:
4.3 Stars
Speaker Rating:
4.5 Stars
Do you have any other comments, questions or concerns?
Very easy listening presentation.

Frequently Asked Questions

Negotiating contracts for maximum value requires preparation, strategic framing, and disciplined execution of proven negotiation principles. The foundational step is thorough preparation: understand your own objectives, the other party's interests, and the full range of terms beyond price—including delivery timelines, payment terms, warranties, liability limitations, and renewal conditions. Establishing a clear Best Alternative to Negotiated Agreement (BATNA) before entering discussions gives negotiators confidence and leverage. Value in contracts is not purely monetary—scope clarity, performance metrics, and risk allocation clauses often represent greater long-term value than price reductions. Use objective criteria such as market benchmarks and industry standards to anchor proposals in credible data rather than positional bargaining. Build in structured review periods and performance incentives that align vendor behavior with organizational goals. Collaborative negotiation approaches that acknowledge the other party's constraints often unlock creative solutions that pure adversarial tactics miss. Strong contract negotiation skills are critical for operations and procurement professionals who want to maximize organizational value while maintaining productive supplier relationships across complex, long-term commercial arrangements.
Minimizing contract risk requires procurement professionals to address both legal and operational exposure through carefully crafted contract terms and a disciplined negotiation process. Key risk mitigation clauses include limitation of liability provisions, indemnification requirements, insurance minimums, and clear termination rights that protect the organization if performance falls short. Force majeure and business continuity provisions have become increasingly important following recent supply chain disruptions, ensuring contracts address how obligations are handled during extraordinary events. Intellectual property ownership clauses must be explicitly defined in technology and creative contracts to prevent disputes over deliverable ownership. Audit rights provisions enable organizations to verify supplier compliance with contract terms, particularly for sensitive or regulated categories. Escalation and dispute resolution mechanisms—specifying processes for resolving disagreements without immediate litigation—reduce the cost and disruption of contract conflicts. Involving legal counsel early in the negotiation of high-value or complex contracts ensures risk language receives appropriate scrutiny. For operations professionals, building a library of pre-approved contract templates and fallback positions for common risk scenarios accelerates negotiations while maintaining consistent organizational risk standards.
Operations professionals negotiating supplier contracts should prioritize terms that govern performance, risk allocation, and operational flexibility in addition to price. Service level agreements (SLAs) and key performance indicators must be precisely defined—ambiguous performance standards are a leading source of contract disputes. Payment terms, including early payment discounts and late payment penalties, significantly affect working capital and should be negotiated as part of the overall value equation. Termination for convenience clauses give organizations the flexibility to exit underperforming relationships without cause, which is particularly valuable for long-term contracts where business conditions may change. Change order processes define how scope modifications are handled and priced, preventing costly surprises during contract execution. Intellectual property assignments, data ownership, and confidentiality provisions protect sensitive organizational information. Price escalation and de-escalation mechanisms tied to commodity or labor indices provide protection against cost volatility. Audit and inspection rights ensure visibility into supplier performance and compliance. Understanding which contract terms carry the greatest operational and financial weight—and prioritizing them in the negotiation sequence—helps operations professionals achieve agreements that deliver sustained value throughout the contract lifecycle.
Effective preparation is the most reliable predictor of success in high-stakes contract negotiations. Begin by conducting a comprehensive analysis of the contract's strategic importance to your organization, the supplier's market position, and the competitive landscape for the goods or services involved. Define your target position, acceptable range, and walk-away point for each material term before negotiations begin. Research the counterparty's financial health, recent contract awards, and publicly known pricing to inform your benchmarking. Identify internal stakeholders—legal, finance, technical subject matter experts—whose input is required and align on organizational priorities before entering discussions. Prepare a detailed negotiation brief that outlines opening positions, anticipated counterarguments, and prepared responses for each key term. If possible, conduct mock negotiation sessions with team members to anticipate pressure tactics and practice maintaining composure under challenge. Document all pre-negotiation decisions so the team presents a unified, consistent position. Assemble contingency plans for scenarios where the counterparty rejects key terms—knowing your BATNA prevents reactive concessions. High-stakes contract negotiations reward preparation; organizations that invest in pre-negotiation analysis consistently achieve better terms than those who enter discussions reactively and without a structured plan.
Reducing legal and financial contract risk through negotiation requires a combination of protective clause insertion, proactive risk identification, and disciplined deal structuring. Liability caps that limit each party's maximum financial exposure under the contract are among the most impactful risk-reduction provisions available. Ensure indemnification clauses are reciprocal rather than one-sided, and that indemnified obligations are covered by the other party's insurance program. Warranties and representations should be specific and time-bound, with clear remedies—such as repair, replacement, or refund—defined for breach. Payment milestone structures that release funds only upon verified performance reduce financial exposure compared to large upfront payments. Governing law and venue clauses should specify a jurisdiction favorable to your organization or neutral to both parties, avoiding expensive out-of-state litigation. Conduct thorough due diligence on counterparty financial stability before signing long-term agreements, particularly for sole-source or critical-path suppliers. Regular contract review and performance tracking after execution ensures contractual protections remain relevant and enforceable as business conditions evolve. Operations professionals who systematically embed these risk-reduction strategies into standard contract templates build institutional resilience that protects the organization across an increasingly complex commercial partner landscape.