I took a commercial Management in projects electives taken by Ian Sim, and it was one of the best decisions for my academic year, to be honest! I learned so much about commercial law and how to protect myself and my business from some common issues. I was exposed to the limitations of my Product Management knowledge concerning the legality of transactions in the PM lifecycle.
The class started by outlining the business models suitable for various ventures, then the terms of offers & acceptance, contracts, problems with contracts and agency, and finally, NEGOTIATIONS. I put that in caps because that was my absolute favourite. When I tell you everyone felt all lawyered up with this course, I’m not even kidding. Here are 10 key things I learnt that should be general knowledge for Managers, Projects/Products combined.
- First off, contracts are at the core of modern businesses. You will get into contracts or appoint agents directly or indirectly to get into contracts on your behalf. Know it, master it. Read your contracts and be absolutely clear on the terms stated. Be intentional about using terms that will protect you and your company while doing business with others.
- To de-risk your negotiations, always have it in writing. Yes, oral contracts are binding but the safest contracts are the ones in writing in which the terms are clear.
- A promise is different from a contract. Read that again.
- If you act as an agent for your company and exceed all authority or fail in your duties to your principal (Simply put, pass your boundaries), you can be held liable.
- Silence cannot be misconstrued; saying nothing/ not responding to dicey situations is legally better than misrepresentation.
6. Speaking of misrepresentation, it is an issue encountered in contract formation. It is of 3 types:
Fraudulent — untrue statements or statements made recklessly without caring if it is true
Negligent — Failure to take reasonable care when making a statement
Innocent — Inaccurate statements made in the honest belief that it is true.
7. Misrepresentations or errors can render your contracts absolutely void (treated like it never existed) or voidable. We do not want that now, do we? Be absolutely careful with statements made during negotiations or contract agreements.
8. Unless absolutely unavoidable, do not breach contracts. Asides from the breach of trust the other party placed in you, there can be severe consequences, e.g. rescission(the other party cancelling the contract) or a claim for damages from the other party.
9. To protect yourself and your organisation, you can limit liability within a contract. This can be done with; an exclusion clause — used by many company websites, a limitation clause — to cap any damages payable or an “Entire Agreement” clause — with statements made during negotiations or contract agreements.
10. Remember that negotiations might not always favour you, so have handy your BATNA (Best Alternative To a Negotiated Agreement). You can accept a proposed agreement better than or equal to the BATNA.
Sneaking in two more tips! 😉
11. Understand when to be a Competitive negotiator and a Cooperative negotiator. Take positions on non-negotiables if necessary and compromise on others to find a balance.
12. Finally, in Negotiations, Always, always reject the first offer. This increases your perceived value (Think about it). You should apply this to salary negotiations. **Rake in some more money for your skills!
Pro tip: You can check out the emotions of negotiations here. I guarantee you’ll be shocked why they offer you coffee in some meetings 😉😉😉 (Ask me why!!).
Pro Pro tip: Take an actual lawyer to your negotiations if you can afford it! Nothing beats that.
