In the simplest terms, renegotiation is a return to the negotiating table after the contract has been finalized.

They usually occur in three situations:

• after the contract expires and then they are used to renew / extend it,

Typically, such talks are initiated before the current contract expires. If the parties approach renegotiation, it means that they are at least partially satisfied with the current cooperation and anticipate its extension. In this case, it is usually easier to negotiate and it is easier/faster to reach an agreement. Opponents know each other’s strengths and weaknesses, have a history of cooperation, and are aware of the risks.

• during the term of the contract and then they result from the need to introduce changes to previously made arrangements,

This type of contract verification usually results from changes in the micro- or macro-environment of enterprises and the need to react to them. Macro changes will concern, for example, legal regulations / changes in regulations or changes in exchange rates. On the other hand, micro-scale changes will be reflected in the technologies used in the company.

You should then review the provisions of the contract in the context of these changes and make new arrangements.

Sometimes, the possibility of renegotiating and changing contractual arrangements is already provided for in the contract. In contracts regulating cooperation over many years, for example, periodic changes or updates are not unusual. Changes may be made to e.g. production processes, price lists, resources used to implement arrangements. Some of these modifications do not have to be included in the contract, while others require formal recognition – an annex to the contract.

• non-contractual issues.

Non-contractual renegotiations may concern, for example, complex international contracts combining business and politics. Let’s imagine that an investor has received a concession to extract some minerals or secured a place in a special economic zone. After some time, cooperators, sometimes supported by representatives of the government/local government, come to him and open negotiations regarding the expansion (or narrowing) of his current activities.

Experienced negotiators know that no deal is signed forever. Before its initialling, the possible risk of renegotiation, or rather changes in the contract, resulting from renegotiations should be estimated. If our contractor’s costs resulting from the withdrawal from the contract and the nuisance resulting from the termination of cooperation are lower than the costs of contract performance in the applicable form, the risk of contract renegotiation is significant.

Therefore, a win-win method can be applied here. In a situation where the dominant party imposes certain solutions and the weaker party is not satisfied with the agreement, that party, under favorable circumstances, will question the sense of continuing cooperation and will either renegotiate or terminate the agreement.

Source:https://poradniknegocjatora.pl/renegocjacje/

Projekt otrzymał dofinansowanie z Norwegii poprzez Fundusze Norweskie 2014-2021, w ramach programu „Dialog społeczny – godna praca”.