Various legal implications arise from the outcome of successful negotiations. Most obvious is that the agreement becomes the basis of a contract between the purchaser and the supplier. Thus the law of contract is an important consideration when preparing for the negotiation, in order that the parties generate an agreement that both are happy to abide by.
Legal Term in Negotiation Preparation
Experts have identified that agreements may include a number of different terms:
- Express terms: those agreed by the parties.
- Implied terms: those not agreed by the parties but which will be assumed by the law, should matters need resort to a court.
- Statutory terms: where the law overrides the explicit terms agreed by the parties.
- Illegal terms: those a court would never enforce even though the parties agreed to them.
Preparation for the negotiation needs to examine these different factors, as they will have a bearing on the way any disputes arising from the agreement will be dealt with. It is worth remembering, however, an old saying that states: when it is necessary to resort to lawyers to resolve disagreements between parties, the only real winner is the lawyer!
Terms and conditions are statements that relate to the extent of the agreement between the buyer and seller. They may be fundamental to the agreement, such that the purchaser may have the immediate right to terminate the arrangement should a breach occur; or they may be incident which may have the effect of limiting any claim.
Legal Advice in Negotiation
To be legal, the contract does not have to be written, although it is more often than not a good idea. Indeed, some agreements may require written contracts under the law, such as land purchases or financial credit arrangements. Written contracts also provide the parties with evidence of agreement and detail of the terms and conditions of the agreement.
There are, therefore, a range of legal aspects to consider when entering negotiations, which include:
- contracts
- the law
- terms and conditions that may impact directly on negotiated agreements
- dispute resolution.
The complexity of the law requires, in many cases, that the advice of a professional is sought in order to draw up an appropriate set of terms and conditions especially where there are long-term implications for both parties. it is far better to have legal advice before the contract is made than be forced to have legal representation in expensive litigation, where two results are possible and one of them is distressing. where the aim of the negotiation is to resolve a dispute that has arisen between the parties, an overview of legal implications is dearly relevant.
International negotiations are especially challenging in terms of understanding the legal information and the implications for negotiation. Differences in legal systems are the most obvious challenge: the UK legal system is based on precedent and legislation whereas many other countries use a system based on codification of legal principles (such as the US and some countries within the European Union). A further layer of complexity is often added where there are regional guidelines on the application of laws, such as in the EU. In preparation for the negotiation, it is important to consider, for example, the implications of taxation, labour codes and standards, differences in contract law and its enforcement.