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13 Contract Negotiation Skills to Refine Before Your Next Negotiation

— 13 Contract Negotiation Skills to Refine Before Your Next Negotiation

If you find contract negotiations to be intimidating, you are not alone.

A surprising number of people, from customers to entry-level employees to executives, find negotiation to be difficult and overwhelming.

Learning some basic negotiation skills can help you improve your outcomes and add to your contract negotiation skills resume.

This guide will discuss … 

  • Contract negotiations
  • Skills
  • Tools;and 
  • Best practices 

… to give you the confidence you need to be a better negotiator.

What Situations Call for Practiced Contract Negotiation Skills?

Nearly every aspect of life and business requires some level of negotiation. 

The goal of negotiation is to create a mutually beneficial arrangement that gives both parties what they want or need without taking advantage of the other party.

You need contract negotiation skills for:

  • Negotiating pay as an employee
  • Purchasing goods
  • Selling goods or services
  • Negotiating employment or contracting services with another person
  • Developing a business partnership
  • Drafting service agreements
  • Real estate transactions and agreements
  • And much more

Having high-level contract negotiation skills can make the difference between walking away feeling like a winner or limping away feeling like a chump.

Why Is it Important to Hone Your Negotiation Skills for Contract Negotiations?

If you don’t have the skills to negotiate for what you want or need, you may get taken advantage of and constantly settle for less than you deserve.

Developing great contract negotiation skills can make you a winner in business and life. 

These skills are not just natural things that you either have or don’t have. Like any skill, you need to learn how to effectively negotiate.

With decades of experience as professional commercial negotiation consultants, The Maker Group can help you learn everything from contract negotiation basics to high-level skills that can help take your business to the next level.

Knowing how to negotiate is important for: 

  • Customers
  • Employees
  • Executives; and 
  • Business owners

Make sure you have the skills you need to succeed.

What Makes a Good Contract Negotiator?

A good contact negotiator knows how to get what they want and how to build a good working relationship in the process.

Contract negotiations do not have to be an aggressive battle. A truly successful contract negotiation lets both parties get what they want. 

A contract negotiation should be a win-win experience.

Some common traits that good contract negotiators possess include:

  • Confidence
  • Good listening skills
  • Knows what is important to both parties and what is not
  • Knowledge of what is being negotiated (competitor prices, market value, etc)
  • Integrity
  • Ability to think and respond quickly
  • Judgment and intelligence
  • Aware of the process and style of both parties
  • Patience
  • Decisiveness, and;
  • Willing to work with the other party to reach a satisfactory end


While some people may be more naturally gifted in negotiation skills, anyone can learn to be a better negotiator.

Our team of experienced and successful commercial negotiators at The Maker Group can help you improve your negotiation skills. 

Employing a rigorous 8 step negotiation process, along with tried and tested behavioral frameworks and decades’ worth of real-world commercial negotiation experience, we consistently exceed client expectations and deliver results.

How Do You Negotiate Contracts?

Negotiating any type of contract requires communication skills, patience, and an understanding of desired outcomes.

There are five phases of negotiation:

  • Communication – be clear about what you want and be a good listener
  • Persuasion – use negotiation skills to get what you want
  • Planning  have goals and a plan before you begin
  • Strategizing – know what, and when, to concede
  • Cooperating – work for a satisfactory result for both parties

Be clear about what you want, have a plan before you begin, and be willing to compromise so both parties benefit from the agreement.

13 Contract Negotiation Skills That Will Help Your Next Negotiation Run Smoothly

While a general sense of business can get you by in contract negotiation, certain skills can improve your outcomes and make it a win-win situation.

#1: Knowing Risk Limitations

What are you willing to give up? 

How much can you give in before you are losing too much? 

Knowing your risk limitations helps you to have a hard line so you don’t give up something that you highly value.

Without knowing your risk limitations, you may inadvertently concede on a point that is critical to your success, costing you … 

  • Hundreds 
  • Thousands; or 
  • Even millions of dollars.


#2: Setting Clear Goals

For you to get what you want out of the deal, you have to first know what it is you want.

Setting goals before you start your negotiation helps you to remain focused on the bigger picture. 

Some questions to ask yourself to help establish clear goals include:

  • What do you consider the best-case scenario in this negotiation?
  • What do you consider the worst-case scenario in this negotiation?
  • What does the other party want?
  • What are you willing to concede to get what you want the most?


In contract negotiation, you should know what you want to accomplish and what it would mean to walk away from the table a winner.

#3: Establishing Your Negotiation Process

The terms of the contract are not the only things that can be negotiated. 

Things to discuss with the other party before contract negotiations:

  • When and where will negotiations take place
  • The procedures followed for negotiations
  • Who will be present during negotiations 
  • The negotiation meeting agenda and points to be discussed
  • The time limit for negotiations

By establishing your negotiation process, you can better plan and prepare for a successful negotiation.

#4: Identifying Your Best Alternative to a Negotiated Agreement (BATNA)

What happens if you need to walk away? Always have a Plan B so that if the deal doesn’t work out you know the best alternatives.

Spend time researching and understanding what you will be walking towards if you walk away from this deal. 

Having a contingency and knowing your best options will help you assess risk limitations and help you know whether or not what they are offering is better than your best alternative.

#5: Making Yourself a Non-Adversary

A common myth is that being aggressive is the best way to negotiate. 

This is untrue and can hurt you in the long run. 

Negotiation is about compromising. Both parties should walk away with something they want. 

Working together to a mutually beneficial solution can build positive, lasting business relationships. 

It’s a win-win.

#6: Building Rapport

Building rapport isn’t just about making small talk to get the other person to like you.

Rapport is about: 

  • Relationships
  • Communication; and 
  • Mutual understanding

Starting a negotiation by building rapport shows that you want to understand the other party and that you are open to working with them. 

Besides increasing your chances of a better outcome, building rapport can have a positive effect on your professional reputation.

#7: Avoiding the First Major Concession

It’s better to avoid making the first major concession in a contract negotiation.

Giving in too quickly can raise the expectations for the other party, leaving you with less than you wanted out of the agreement.

Making smaller compromises or concessions is fine, but do your best to avoid being the first to give in on any major issue.

It may indicate to them you are desperate and may be willing to give up more than is needed to get the deal done.

#8: Finding Savvy Concessions

Knowing what matters most to you and building rapport to learn what is of higher importance to the other party can help you make savvy concessions during the negotiation process.

You can start by asking for more than you want or expect and having a clear plan about what you are willing to compromise to sign the contract.

Know what matters most to the other party and be willing to compromise on those points so you have more bargaining room on issues that you want and need most.

#9: Actively Listening and Following Up

Most people listen to respond. Excellent negotiators listen to understand.

You can show your listening skills by paying attention and recalling talking points to the speaker so any misunderstandings can be clarified.

Ask good questions and follow up during the discussion. 

Being an active listener gives you the advantage of knowing the other party better and earns you respect.

#10: Limiting Your Authority

During contract negotiation, having ultimate authority can work against you. 

By limiting your authority, you have an advantage during negotiation. You can put off a decision on another individual or position, saying that you will need to check with them before certain points can be conceded.

This removes the negative pressure from you and makes the hard line on a higher authority. 

The other party may be more likely to concede to get the deal done instead of waiting on you to take it higher up.

#11: Anchoring First

In contract negotiation, making the first offer is called anchoring.

Anchoring sets a baseline or tone for the negotiation.

You develop cognitive bias and can influence the other party by making the first offer.

If you set an anchor offer already knowing you are willing to concede on some points, you may come away with more than you expected.

#12: Presenting Several Offers at Once

Contract negotiation doesn’t have to be like a game of Pong: making an offer, receiving a counter, going back and forth until an agreement is reached.

By presenting several offers at once, you may influence the way the other party perceives the negotiation.

Multiple offers can be used to make certain options look more appealing.

You can also give the impression you are open-minded and willing to work towards a solution that benefits both parties by presenting more than one proposed outcome.

#13: Playing Into Reluctance

In a contract negotiation, take your time to think before responding to any offer or counter-offer.

You might inform the other party that you will need to think about it or discuss the issue with another party to indicate reluctance.

Giving in or saying yes or no too quickly can send the wrong message. 

Instead, play into reluctance and place the sense of urgency on the other party. 

By showing patience, you may find they are willing to concede to get the deal done now.

Improve Your Tactics Through Contract Negotiation Skills Training With The Maker Group

Contract negotiation skills are critical to success in business, employment, and life. Having the right skills can help you capitalize on opportunities and get more of what you want. 

Why settle for whatever minimum someone is willing to offer you?

The Maker Group offers consulting and negotiation skills courses that will deliver value and help drive profitability.

Our exclusive Maker Framework process uses proven behavioral psychology models to answer the “what” and the “why” in regards to effective negotiation execution, leaving you and your team confident to tackle any problem.

Don’t count on mediocre contract negotiation skills to get you ahead in business. Let the years of experience and expertise of The Maker Group, one of the top negotiation consulting firms, help you optimize your contract negotiations and get you more out of business and life.

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