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Introduction
Contract drafting and negotiation are skills sine qua non for all in the legal field.
Contract drafting is a super useful skill even for law students. It helps you understand how legal agreements work in the real world, makes your resume stand out for internships, and can also lead you to freelancing opportunities.
Later, it helps you get an edge during your employment. According to an empirical study done by 6figr.com on 70 verified profiles in India for 2025, employees who know Contract Drafting earn an average of ₹22.7 lakhs, ranging from a decent ₹15.0 lakhs to even a whopping ₹47.3 lakhs!
Want even more reasons to get to know the skill? Think freelance. Check out the post ‘Freelance Contract Drafting: 12 Reasons Why Freelancing is a Lucrative Opportunity for Legal Professionals’ to get more insights into the same. .
One significant aspect of the procedure is negotiating the contract before drafting it. Knowing how to negotiate well and draft a foolproof contract can never hurt. It’ll come in handy as an advocate, counsel, associate, in-house consultant and even in your day-to-day life.
For instance, a recent example of swift negotiation was JSW Steel’s acquisition of National Steel & Agro Industries in May 2023. Although the entire process spanned approximately 400 days, it only took nearly 180 days for the debtor and creditor to agree on how to proceed. This example highlights the importance of having competent and compelling negotiation skills to expedite decision-making. And as they say, time is money!
Further, as a lawyer, negotiation will be a daily task and knowing how to negotiate will be non-negotiable! However, many find it challenging to negotiate commercial contracts. This is where you can set yourself apart.
Want to become a master negotiator? Keep reading!
5 Success Tips to Abide By
While it’s impossible to list everything you should keep in mind when negotiating a commercial contract, here are a few key things to consider before you settle on your strategy:
Mind the Use of Language!
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Always stick to clear, business English when drafting a contract. Avoid using too much jargon or Latin terms. Using simple, easy-to-understand language helps everyone involved fully grasp the meaning of each clause.
For instance, instead of saying, “Heretofore, the parties have agreed to the terms outlined,” you could just say, “The parties have already agreed to these terms.” Or, rather than using “notwithstanding anything to the contrary herein,” just say “despite any other terms in this agreement.” These simple changes make the contract much more precise and help speed up negotiations.
Also, remember, complicated wording doesn’t make a contract more enforceable; it just makes it harder to understand!
Use Facts, not Feelings!
Negotiation can be emotionally draining, but it is important to separate one’s feelings from the facts. A successful negotiator stays focused on the issue, not personal emotions or difficult personalities.
For instance, imagine you’re negotiating a contract with a partner who is challenging to work with. Instead of letting their attitude affect your mood, focus on the facts, such as the terms you both agreed on.
By keeping emotions in check and viewing negotiation as a way to reach common goals, you can navigate through tension and get to a solution much faster.
Leverage the ‘Offer-Concession’ Strategy!
You need to negotiate in a way that makes the other party feel like they’ve struck a good deal. One key to doing this is never revealing your BATNA at the start of negotiations. In fact, it’s often best to keep your BATNA to yourself entirely. When the other party feels like they’ve gained something valuable, reaching your desired outcome is much easier.
What’s BATNA?
BATNA stands for Best Alternative to a Negotiated Agreement. Before entering a negotiation, a skilled negotiator needs to know their BATNA, i.e., what their best option is if the negotiation falls through.
This knowledge helps them decide when to walk away or when to push for a better deal. By anticipating the need for an alternative, a good negotiator can navigate tough situations, keep the negotiation moving forward, and maintain transparency with all parties involved. Next –
Prioritize, and then Act!
A contract has countless elements that could be negotiated, but focusing on everything is unrealistic. It is crucial to identify your client’s key priorities and negotiate around them. Don’t invest energy on minor points that won’t significantly affect the outcome. Instead, keep your focus on the deal-breakers and the absolute non-negotiables.
For example, if you’re negotiating a partnership agreement, your client may be firm on the payment terms but flexible on the delivery schedule. Don’t get bogged down negotiating the exact delivery timeline if the payment terms are the absolute priority. Focus on securing those terms first and leave the less critical details for later.
Industry Standards Are Not Easy To Negotiate, So Use It To Your Advantage!
If you’re negotiating a loan agreement and representing the bank, it’s much easier to justify your position by stating that the terms align with market practice. This shifts the burden onto the other party to convince you that an exception should be made. Knowing your position, the market, and your audience is essential before deciding your negotiation strategy.
For instance, if a borrower insists on a lower interest rate, you could counter by explaining that your rate is consistent with current market trends. This way, you’re positioning your terms as reasonable and within industry norms. This makes it harder for the borrower to argue for a lower rate.
Some Resources to Become a Pro
As Edgar Dale said, “We remember 10% of what we read, 20% of what we hear, 30% of what we see, 50% of what we see and hear, 70% of what we discuss with others, 80% of what we personally experience and 95% or what we teach others.”
So here are some video resources to help you get some more useful insights into the art of negotiating:
The Harvard Principles of Negotiation: here. This video gives a glimpse into ‘The Harvard Approach’ and reveals strategies to secure a ‘Yes’ in every negotiation.
William Ury’s Youtube Videos: here. He is a negotiator, mediator, peace advocate, speaker, and co-founder of the Harvard Program on Negotiation. His channel is full of gems on real-life negotiation.
Deepak Malhotra’s (Professor at Harvard Business School) Negotiation Tips: here. In this video, award-winning negotiation expert Deepak Malhotra leads an interactive session, sharing practical tools and tips to help you negotiate confidently. .
Put Your Skills to the Test
That’s been a lot of learning. Now, let’s put what you learnt to test.
Situation 1: Negotiating a Service Agreement
Scenario:
You are a legal consultant assisting a client who owns a logistics company. They are negotiating a contract with a manufacturing firm for transportation services. The manufacturer wants to include a clause stating that delays of up to 10 days will not result in any penalties. Your client, however, insists on strict delivery deadlines with penalties for delays beyond 3 days.
Questions:
- How can you ensure that the contract language is clear and avoids unnecessary jargon?
- What strategy should you use to keep the negotiation factual and avoid emotional conflicts if the manufacturer insists on their position?
- How can you apply the “Offer-Concession” strategy to make the manufacturer feel like they have secured a good deal while maintaining your client’s key priorities?
- If your client is most concerned about payment security rather than delivery delays, how should you prioritize the negotiation process?
- How can knowledge of industry standards help in justifying your client’s position?
Suggested Strategies:
Use plain language instead of legal jargon. For instance, “The carrier must deliver goods within 3 days of shipment” instead of “The carrier shall effectuate delivery within a period not exceeding three calendar days.”
Focus on objective terms such as delivery timelines and potential financial losses rather than the other party’s resistance or attitude.
Offer a slight concession, such as extending the penalty-free delay period to 5 days instead of 10, while securing a commitment to stricter payment terms.
First, finalize strong payment terms (for example., upfront deposit or phased payments) before debating delivery delays.
Reference industry standards that typically allow only 2-4 days of permissible delays and show that your client’s request is in line with market norms.
Situation 2: Negotiating a Loan Agreement
Scenario:
You represent a bank in negotiations with a corporate borrower seeking a business loan. The borrower wants a lower interest rate than what is currently being offered and argues that another bank has given them a slightly better rate.
Questions:
- How can you ensure clarity in the contract’s interest rate clause?
- How should you handle the borrower’s argument without letting emotions interfere?
- How should you leverage your BATNA to strengthen your negotiation position?
- If your bank prioritizes long-term lending relationships over interest rate flexibility, how should you frame your negotiation approach?
- How can you use industry standards to justify the proposed interest rate?
Suggested Strategies:
Clearly state the agreed interest rate, applicable conditions, and any possible revisions (say, for instance, “The loan shall bear interest at 8.5% per annum, subject to adjustment based on market fluctuations”).
Stick to objective financial comparisons rather than reacting to pressure from the borrower.
Keeping your BATNA private prevents the borrower from leveraging it against you and helps maintain a stronger negotiation position.
Emphasize additional value beyond the interest rate, such as flexible repayment terms or faster loan approval.
Show that the proposed interest rate is aligned with market conditions and provide industry data to support your position.
Want to Learn More?
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These tips were derived from the extensively prepared modules of the Online Certificate Course on ‘Contract Drafting & Negotiation’ by LLS. Check out the course to gain all the insights it has to provide. You can also look at ‘Self-paced Contract Drafting Pro: Mastering 20+ Legal Agreements.’ These courses by LLS are:
- Developed by experts who have worked at top law firms like Trilegal, SAM, and Khaitan and Co., and in-house at corporates like HDFC and Infosys.
- Packed with practical, real-life content to help young lawyers start earning, and law students stand out during internships.
- Reviewing simple agreements can earn you Rs. 5000 per agreement, while drafting complex agreements can bring in 2-10 lakh rupees.
- Includes a module on negotiation, a crucial skill that can help you negotiate rent agreements, employment contracts, and M&A deals worth crores.
- Save yourself 4 years of legal career learning by mastering the same skills in just 2 months.
- Learn how to negotiate effectively in daily life, job interviews, contractual negotiations, and competitions.
Want to get Expert Knowledge? You can check out the ‘4-Month Long Advanced Course on ‘Contract Drafting & Negotiation’ by LLS. In addition to the above benefits, you additionally:
- Learn to draft 20+ complex, in-demand agreements and become an expert in different types of agreements.
- Understand the nuances of international contracts, including arbitration rules and governing laws, to expand your freelancing opportunities.
- Excel in your general Corporate Law practice or work in a Corporate Law firm.
- Earn as a freelance contract drafting professional.
- Help law students ace Law Firm internships and allow litigating lawyers (with 0-4 years of experience) to earn additional income through contract drafting skills.
- Show you how to draft terms and conditions for websites.
Want to freelance part-time as a law student or full-time as a remote contract drafting freelancer? We got you!
The ‘6-Month Long Course ‘Becoming a Freelance Contract Drafting Expert’ by LLS consists of 44 live sessions led by industry experts and empowers students to draft over 24 complex contracts, including website terms and international agreements. It also teaches you how to excel as a Contract Drafting Freelancer through platforms like Upwork, LinkedIn, etc. Get the following benefits:
- Well-researched, practical, and detailed reading resources.
- Weekly live sessions for the first 2 months. 7-8 live sessions per month for the next 4 months.
- Learn drafting clauses and agreements first-hand with our expert faculty.
- Recorded lectures by industry experts.
- Monthly freelancing and networking sessions.
- Practical assignments on real-life scenarios, including drafting and receiving feedback on your draft agreements.
