Hi – my name is Danielle Lafollette with Venminder.
In this 90-second podcast, we’re going to review our most valued contract negotiation tips.
At Venminder, we have a team of industry experts such as paralegals who specialize in reviewing vendor contracts every day.
Here are 10 vendor contract negotiation tips to be aware of:
- First, begin with a standard contract template and revise it as the negotiation progresses.
- Second, determine who should be involved in the negotiations, such as an attorney or CFO.
- Third, determine the departments involved in negotiation, such as legal or the line of business.
- Next, document who is authorized to change the agreement.
- Fifth, use a reliable tool to track the request for proposal (or RFP) and negotiation process. We don’t recommend a manual process, like Excel.
- Sixth, never enter a vendor contract without a legal review. This is important and will help with catching issues upfront!
- My seventh tip is don’t mistake a legal review for a compliance review. Your lawyers will protect your liability but, depending on their level of experience with regulatory compliance, they could miss the issues that make it difficult for you to meet your ongoing due diligence requirements.
- Eighth, as you negotiate, make sure the contract calls out specifics, such as the scope of the business arrangement and operations, frequency, format of service, product or service the third-party will provide and how these will be performed.
- Number nine is to ensure you have the written right to audit and monitor the third-party and require them to provide remediation when issues are identified.
- Lastly, understand the vendor’s inherent risk and address the risk in the contract by implementing extra controls, as needed.
As you can tell, contract negotiation is a meticulous process. Be sure to consider these 10 tips in your next negotiation process.
Thanks for tuning in; catch you next time!