Negotiation is a vital aspect of business and an important skill to master. Always striving to close a negotiation should always be your aim. However, there comes a time when it's clear the deal isn't going to work and it's time to walk away. 

Accepting negotiation terms that don't suit your end goal can be disastrous for your sales initiative and lead to losing money, employees, time, and even your reputation. So, if you're not sure when to walk away from a contract negotiation, here are some important signs to look out for. 

The Vendor Doesn't Fit With Your Company

Having a clear mission in mind for your product and business is important, and it's vital that the vendor of your negotiation remains in line with that. 

Remember, it's your product and its success directly impacts your company, so finding the right person to suit you is more important than changing your parameters to suit the vendor. 

One example of a business owner who benefitted from letting go of a contract negotiation is BP's CEO Robert Dudley, who negotiated a partnership with Rosneft. However, BP walked away from the negotiation when it became apparent that TNK-BP, a company co-owned by BP, did not see eye-to-eye with Rosneft. Walking away from the initial contract negotiations enabled the parameters to be reconsidered and, two years later, the companies came to a conclusion that benefitted each party. 

The Negotiation Terms Keep Changing 

Sometimes, negotiations can feel like they go on forever. So, when the terms change after weeks of meetings, it's tempting to accept them, regardless of if they work for you — a form of sunk cost fallacy. However, changing the terms at a late date in the hopes the other side is so invested in the negotiation they will agree against their wishes is a common tactic used by vendors. 

Feeding into someone who uses these tactics is no way to start a working relationship and won't benefit your company. In this circumstance, it's best to walk away from a negotiation, regardless of how much time went into it. 

You Have to Compromise Your Values

Your values are integral to your business. Customers and clients make decisions on who they do business with based on shared values. So, compromising them to close a negotiation will not only make life difficult for you but could deter returning customers. 

Furthermore, it's equally important to walk away from a negotiator who you believe is dishonest or deceptive. Dishonesty during the early negotiation stages will result in a rocky business relationship going forward and should be avoided. 

How to Present a Contract for Success

How your contract is presented drastically impacts how it's received and how the vendor behaves during the negotiation process. A contract that looks put together and seamless will result in a higher success rate in your negotiations. Be sure to merge PDF​ files to help your documents appear polished. 

Avoiding Potentially Bad Deals

Ensuring you can spot bad deals is a key part of business strategy, and using these red flags can help you identify when it's not going to work out for you. 

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