When you’re in business, contracts are at the heart of almost every deal. Whether you’re negotiating with suppliers, customers, or other business partners, having a general counsel to guide you through the contract process is essential.
At VIA Lawyers, based in Miami, Florida, we understand how critical it is for businesses to have a trusted legal advisor during contract negotiations.
Our legal team can protect your interests, minimize risks, and confirm that the contracts you sign align with your company’s goals and legal requirements. But what exactly can you expect from your business general counsel during these negotiations? Let’s break it down.
What Does a Business General Counsel Do in Contract Negotiations?
A general counsel (GC) is an in-house lawyer who advises the business on a wide range of legal matters, including contracts. In contract negotiations, their role is to guide you through the legal arena, helping to shape the deal, verify the terms are fair, and protect the company from unnecessary risks.
Here’s a breakdown of what a business general counsel can do for you during contract negotiations:
Contract drafting and review: The GC drafts the initial contract or reviews drafts provided by the other party. They make sure that the terms are clear, fair, and legally enforceable.
Risk analysis: They assess the potential legal and financial risks of the contract, identifying any provisions that could expose the business to liability or obligations that may not be in the company’s best interest.
Negotiating terms: Your GC plays a crucial role in negotiating the terms of the contract, advocating for your business’s position, and finding mutually agreeable terms with the other party.
Compliance check: The GC assures that the contract complies with all applicable laws and regulations, which is especially important in industries with intricate legal requirements.
Final review and approval: Before any contract is signed, the GC does a final review to verify that all changes have been made and that the terms are as favorable as possible for the business.
Steps Your General Counsel Takes in Contract Negotiation
In most contract negotiations, your business general counsel will follow a structured process to confirm that all aspects of the contract are carefully considered and that the terms are in line with your business goals. Here’s an outline of the key steps your GC takes during contract negotiations:
Pre-negotiation preparation: Before negotiations begin, your general counsel will review all relevant background information about the deal. This includes understanding the nature of the agreement, the business goals, and the potential risks. They’ll also assess the relationship with the other party and any historical context that may impact the negotiation.
Drafting the contract: Once the general counsel has a clear understanding of the terms you want to achieve, they'll either draft the contract themselves or work with external legal counsel to create the first draft. This will include all key terms such as payment schedules, deliverables, timelines, and dispute resolution procedures.
Negotiating terms: As negotiations begin, your GC will be at the table (or on the phone, in some cases) advocating on your behalf. They’ll identify areas where the other party may be overreaching and suggest adjustments. They’ll also work to find areas of compromise that work for both parties while still protecting your business interests.
Identifying potential risks: Your general counsel will be on the lookout for any clauses that could expose the business to unnecessary legal or financial risks. For example, they’ll confirm that there are no one-sided indemnity clauses or vague terms that could be interpreted to your disadvantage.
Reviewing and revising: Once the other party presents their proposed changes, your GC will review them carefully. If necessary, they'll revise the contract to verify it meets the needs of your business while maintaining a fair and balanced approach.
Final approval: Before you sign, your GC will give the contract one last thorough review to make sure it aligns with your goals, meets all legal requirements, and adequately protects your business. They’ll also make sure that the terms are clear and enforceable.
The Importance of Risk Management in Contract Negotiations
One of the most important roles your business general counsel plays during contract negotiations is managing risk. Every contract has inherent risks—whether it’s financial, legal, or reputational—and it’s essential that these risks are identified and mitigated before the contract is finalized.
Here are some common types of risks your GC will address during negotiations:
Financial risk: Your GC will make sure that the terms related to payment, fees, and other financial obligations are clearly defined and that your company isn’t exposed to unexpected costs.
Legal risk: Your general counsel will verify the contract complies with relevant laws and regulations and that the terms don’t inadvertently create legal liabilities, such as issues with intellectual property or breach of contract.
Operational risk: In some cases, the contract may include terms that could affect your business operations. Your GC will identify these risks and make sure they’re manageable or mitigated.
Reputational risk: Certain contract terms can create reputational risks if the business is tied to unethical practices or controversial partners. Your GC helps avoid these pitfalls by negotiating terms that align with your company’s values and reputation.
Dispute resolution risk: A critical aspect of contract negotiations is how disputes will be handled. Your GC will make sure that the contract includes clear, fair provisions for dispute resolution, such as mediation or arbitration, to avoid lengthy, costly litigation.
By addressing these risks during negotiations, your business general counsel protects the long-term interests of the company and helps to avoid any unforeseen challenges after the contract is signed.
Clauses Your Business General Counsel May Negotiate
Certain clauses in a contract can have a significant impact on your business, so your general counsel will give special attention to these areas during negotiations. Here are some of the most common clauses they’ll focus on:
Termination clause: This clause outlines the circumstances under which the contract can be terminated and what happens if either party fails to fulfill their obligations. Your GC will make sure this clause is fair and allows for termination if necessary to protect your business.
Confidentiality clause: Confidentiality agreements are crucial in many business contracts to protect sensitive information. Your GC will confirm the confidentiality clause is broad enough to cover all necessary information but not overly restrictive.
Indemnification clause: This clause specifies who will bear responsibility for damages or liabilities in the event of a breach or other legal issues. Your GC will verify that indemnification provisions are balanced and that your business isn’t unduly exposed to liability.
Dispute resolution clause: It’s important to have a clear process for resolving disputes, whether through litigation, mediation, or arbitration. Your GC will negotiate terms that are favorable for your business and minimize the costs associated with dispute resolution.
Force majeure clause: This clause deals with unforeseeable events that could prevent either party from fulfilling their obligations. Your GC will make sure that the clause covers common situations such as natural disasters or government actions that could disrupt the business.
The Value of an Experienced General Counsel
An experienced general counsel brings several key benefits to the table during contract negotiations. They not only understand the legal challenges of contract law but also have a deep understanding of how business works. Their ability to interpret legal language, assess risks, and communicate effectively with other parties can make a significant difference in the outcome of a negotiation.
In addition to the tactical skills they bring, your general counsel also provides long-term strategic value:
Building stronger business relationships: By helping you craft fair and balanced contracts, your general counsel can foster stronger relationships with your business partners, suppliers, and customers.
Adapting to changing business needs: As your business grows or shifts, your general counsel can help adapt contracts to meet new challenges or opportunities.
Protecting the company’s interests: The ultimate goal of your GC is to protect your business. They do this by assuring contracts are legally sound, strategically beneficial, and aligned with the overall goals of your company.
Contact Us Today
Negotiating contracts is an integral part of doing business. Having a skilled general counsel at your side can make a significant difference in protecting your interests and achieving favorable outcomes. At VIA Lawyers in Miami, Florida, we provide comprehensive legal services to businesses of all sizes. We proudly serve Miami and surrounding areas, offering legal guidance for all your business needs. Contact us today and let us help you with your business contract negotiations.
