2012 Top Terms in Negotiation
Published: 14 Nov 2012
Average Rating: 5 / 5
Contracting and commercial capability have risen in importance on the Corporate agenda – and IACCM's 11th Annual Study of the Most Frequently Negotiated Terms explains why. Continued turmoil in global markets, coupled with a wave of regulation and shifting economic power, are creating an environment of increased complexity and risk, which is having a major impact on contract negotiations.
This year's study reveals changes that are far more dramatic than at any time since inception of the report. Among the highlights:
- Markets are fragmenting; major corporations are either choosing or being forced to shift the focus of their negotiation in international markets as local issues or concerns challenge standard templates.
- The buy-side / sell-side agenda has become more polarized, reflecting a growing divergence of concerns and increased focus by Legal and contracting specialists on supplier risk.
- The frequency of negotiation and of post-award claims and disputes has increased, driven by a combination of rapid power shifts within industries and between countries, and economic conditions that result in cost-cutting and adversarial behaviour.
- There are encouraging signs that negotiators are placing greater focus on terms that impact risk probability. However, there are also indications of diminished trust between buyers and suppliers, with collaboration occurring only between a select few.
These changes have significant implications for workload, skills, operational management and risk. They demand revised contract and commercial strategies and increase the urgency of steps toward 'intelligent contracting'.
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