OsamaBinClosin

Business Development Lead

Valued Contributor

Contract Negotiation Stalled over Governing Laws - Insight

Whats up legends.

I am dealing with a particularly difficult scenario I thought I would get your insights on.

I sell Financial Tech solutions and am negotiating a deal in an emerging market economy. All was well and gucci with pricing etc. and I am days away from putting pen to paper on this ALAS their legal team has come back to strongly push back against the governing laws on our contract. We had initially agreed with the business team to use a third party jurisdiction for the contract, however, they came back to say the governing law has to be their home country.

Now obv my legal team said hella naw to that and explained our stance ie. technology risk, IP risk etc. and we should be looking to a mutually agreeable third party jurisdiction. I've been cooking this deal over a year now and if it all collapses thats gonna be absolute poop.

Anyone got some insight on any advice or strategy used to overcome this?

☁️ Software Tech

10

12 comments

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4

Head of Growth

Has your legal team dug into the suitability of the governing laws in your buyer's country or is it just their pre-populated redline strategy? When I run into issues like this at the last hour, I schedule a call with my legal team first to ask the right questions and figure out what ALL suitable solutions look like & ask enough questions to be able to go back to my champion & fill them in/ask for their help. Are there other US vendors this buyer uses? What do those contracts look like?

bigfella

Tycoon

3

AE (Account Executive)

They may be using the jurisdiction issue as a way to express larger concerns about the deal itself. It's important to address this head-on. Your main goal should be to uncover if this is cold feet then to alleviate their fears about the risks they perceive under a third-party jurisdiction. Use precedents: show examples of similar agreements you or other companies have had under the same jurisdiction that worked successfully and didn't lead to exploitation of the other party.

braintank

Politicker

3

Enterprise Account Executive

Sometimes you can leave it vague.

HVACexpert

Politicker

2

sales engineer

Yeah unfortunately legal teams need to make sure their pay is worth it and contract terms and conditions is always a place they like to flex their legal muscles.

I would suggest maybe having the customer red line or revise what you have proposed and send to your legal team for review, treat it like a negotiation and keep your sales team involved so you can all come to a compromise.

CuriousFox

WR Officer

3

🦊

Legality shmegality

HVACexpert

Politicker

1

sales engineer

Lawyers suck

Justatitle

Big Shot

1

Account Executive

As some would say "billable hours"

FinanceEngineer

Politicker

1

Sr Director, sales and partnerships

I really can’t offer any help in this. Sometimes, dead die in legal. I hope you are able to convince your company to make an exception or have a clause written in to bridge the gap on issues

Pachacuti

Politicker

1

They call me Daddy, Sales Daddy

you need to connect your legal with their legal and let them hash it out. Don't be the go-between here. Set the meeting and have them work it out asap.

Sunbunny31

Politicker

0

Sr Sales Executive 🐰

This is where you also engage the business to let them know that legal is changing the terms you'd agreed to. If they are championing this deal and want your solution, they should be able to also help work with legal on their end.

Maximas

Tycoon

0

Senior Sales Executive

So two questions here,when you initially stated that your team has agreed with the other business team already to use a third party jurisdiction for the contract and the other party didn't comply.
If it was a written consent by the other party could your team push legally to let them proceed with what they have already agreed to,if yes ,that's great then you need to go with this path!
If not,and you still don't wanna miss it ,the best option in this case is to let your legal team have a look on the governing laws in their home country, to see if it could be considered as a suitable jurisdiction that can be counted on and that your company wouldn't be treated unfairly when it comes any dispute at any time or not ,if it's OK great go for it,if not so it's gonna be a helluva NO and see em next time!

Justatitle

Big Shot

0

Account Executive

Can you broker a call between the two legal teams and be sure to moderate it? Literally, this is the only way I have seen this workout. The lawyers get together they posture to make it seem that they are essential, which they usually are, then they come to an agreement and the contract gets signed.

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