International Multi-Party Projects: The Importance of Negotiating Process in Cross-Border Contractual Relationships
22 Pages Posted: 6 Jul 2011 Last revised: 23 Dec 2012
Date Written: July 5, 2011
During contract negotiations we negotiate content but often forget process. Content- the subject of the transaction – is what parties have their focus on naturally. On the other hand, how parties will collaboratively achieve their goals (the process) is an often-overlooked aspect in contracting and contracts. Yet, this element of the contractual relationship is as important as arrangements with regard to the content to achieve successful results. This is particularly so in cross-border contractual relations, where miscommunication about the ‘how’ may easily lead to conflict and have significant consequences for achieving the goal of the agreement. Therefore, the question I address is what negotiators should address regarding the process of collaboration during the contracting process to minimize the chance of conflict and optimize the success of the parties’ efforts in a global market? I use the example of contracting for complex infrastructure projects to illustrate the interrelation between conflict, achieving the goals of the contractual agreement, and failure to discuss the collaboration process. Second, I draw upon literature on critical success factors to identify what elements related to the process of collaboration negotiators may want to include in the contract negotiations of long-term contractual relationships.
Keywords: inter-firm relations, negotiation and collaboration, multi-party projects, conflict
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