contract preparation negotiation

1
contract preparation / negotiation

• Therese Oppermann
• introduction entertainment law
• METKA, University of Oulu

2
why

• why are you doing the deal?
• what do you want to get out of it?
• Commercial
• Political
• Industry credibility

3

• Know what you want
• Know what you need
• Know when to compromise
• Its OK to walk away
• Structure their expectations

4
anticipate

• anticipate resistance
• think about what their problems might be
• work out a reply
• work out an argument or reason in reply to their
  problems / arguments

5
compromise

• negotiation is a compromise
• know what is core
• offer to drop what is not important
• in return for getting what you need
• dont offer
• without getting something in return

6

• Talk about as many issues as possible at
  beginning
• Everyone is friends at the beginning
• Conciliatory / co-operative / willing to
  compromise
• No-one wants to talk to you at end

7
make clear what is agreed / still negotiable

• Take notes during meetings
• Summarise regularly during discussions
• Confirm discussions in emails / faxes

8

• Sustainable results
• Dont screw them
• or they will screw you
• slowly
• over time
• by stealth

9

• Give them what they want
• on your terms
• Identify what need / why they need it
• dont give away more than you have to
• Dont hold out for sake of holding out

10
risk management

• identify all risks
• allocate responsibility
• what if scenarios
• if .then..

11
what are you getting

• rights
• services
• goods

12
promises not puff

• Dont make glory promises
• Promises must be achievable
• Do you own / control the rights
• Do you have the resources to provide services /
  provide materials

13
what are you getting - rights

• works
• uses
• media
• territory
• term

14
rights generated by contract / rights in
modifications

• Ownership - who owns / controls
• Purpose - what can you use it for
• Authorised - who can use it
• What if
• you want to use it elsewhere
• someone else wants it

15
what are you getting - services

• quality standard
• timeline and milestones
• key personnel
• rights in the results of the services

16
what are you getting - goods

• specifications
• external objective standard
• timeline and milestones
• acceptance testing
• intellectual property rights in the goods

17
cash

• Fee
• Fee per use / user / period
• Fee for other uses / purposes
• Profit Share
• Amount - one-off or instalments
• Calculation flat or percentage / royalty
• When - signing / delivery / acceptance / periodic

18
term

• term
• including options to renew
• Timeline
• Milestones

19
variation

• What if you need to change something
• What if the world changes
• Who can authorise the change
• Person should be someone accessible
• NOT just someone important

20
better be safe than sue a 2 company

• dont rely on the warranties
• do preliminary due diligence
• Ask for references
• Sample their materials / services
• company search
• Dunn / Bradstreet search
• Google search
• Press clippings

21
what if something goes wrong

• Complaints procedure / dispute resolution
• Fix it / replace it / do it again
• Pay for replacement / someone else
• Refund / Discount
• Liquidated Damages
• Termination

22
liquidated damages

• time-consuming/difficult to prove damages
• go through all accounts and records
• find relevant people to give evidence
• quantify amount as liquidated damages
• genuine pre-estimate of damages likely to flow
• must be genuine pre-estimate
• otherwise unenforceable as a penalty

23
liquidated damages - benefits

• innocent
• dont have to prove amount actually incurred
• defaulting
• know their maximum exposure
• can plan, manage and budget
• can take out insurance to cover risk

24
will I ever read this again

• contract negotiation is education process
• make sure each party understands
• what their obligations are
• what the risks are
• who is responsible if something happens

25
what if

• contracts wont always solve disputes
• BUT contracts set framework for settlement
• a strong contract does not mean
• that you will win and get everything you want
• BUT a strong contract gives you a stronger
  negotiating position
• you will still need to compromise to settle