From Art to Science: 3 Steps to Better Contract Negotiations

Lawyers say that negotiating contracts is an art, not a science.

At Ozeki, we’re here to fix that. We believe that lawyers don’t have the right information at their fingertips to turn negotiations from art into science. Here’s 3 steps to turn your contract negotiations from art into science.

Step #1: Learn What Matters to the Business

There's a difference between actually knowing what matters to the business and assuming you know what matters to the business. The default position is that contract negotiation is about risk avoidance. This may or may not actually matter to the business in the short run. In fact, risk mitigation may only matter if something goes wrong with the deal outside of the regular course of business. So, until you take the time to figure out what truly matters to the business, you’re making a mistake. This mistake leads contract negotiations to focus on clauses like indemnification and limitation of liability. Those may be key clauses, but they may or may not be what matters most to the business. In fact, they’re usually very low on the list of priorities.

What to do: Figure out what truly matters to the business. Identify deal terms. Map them on a spectrum or sliding scale. Rank them. Find your must-haves, your nice-to-haves, and your not-importants. This moves you away from issue spotting and reactionary redlining and elevates contract negotiation to a process that unlocks contract value.

Example: Your team is negotiating a vendor services agreement. Finance prioritizes net-60payment terms for cash flow. Operations needs guaranteed delivery windows.Legal focuses on indemnification and liability caps. After surveying stakeholders, you rank: payment terms (must-have), delivery schedules(nice-to-have), and indemnification scope (flexible).

Step #2: Learn What Matters to the Other Side

The next step is harder. If you’ve completed Step 1 and figured out what matters to the business, you’re only looking at one side of the coin. You need to use negotiation to discover what matters to the other side. If you avoid this and think that it’s not your job to look out for the other side, you’re making another mistake. If you try to negotiate myopically - focusing only on what your business cares about -negotiations will be slow to advance beyond back-and-forth redlines. It will be harder to arrive at an optimal outcome for both parties.

What to do:Actively listen to the counterparty. This doesn’t mean to listen just so you can reject their request as unacceptable. Remember, if you’ve completed Step 1, you know what matters to your business and what doesn’t matter. So you can listen to your counterparty and hear what matters to them. Rank their wants.Identify their must-haves, nice-to-haves, and not-importants.

Example:  During redline review, the vendor pushes back hard on your audit rights and data handling provisions. They also request specific confidentiality protections around their processes, but they engage constructively on payment terms without strong objection. This reveals their priorities: operational control and protecting proprietary information matter most to them, while payment timing is more flexible.

Step #3: Learn How to Trade

You've completed Steps 1 and 2: you know what matters to your business and your counterparty. But don't let those victories go to waste. The best negotiations aren’t about accepting or rejecting redlines until there are none left. This leaves value on the table. Use the knowledge you’ve gained in Steps 1 and 2 to make smart trades.

What to do:Every deal point is an opportunity for a trade. Once you’ve identified what matters to your business and what matters to your counterparty, you can move beyond accepting and rejecting redlines at random. Look for asymmetric value:what deal points are high-priority for one party but low-priority for the other? These mismatches create trading opportunities where both parties can win. This is how you can trade deal points so that you can both get what you want and arrive at an optimal outcome.

Example: Your finance team needs net-60 payment terms (high priority), but legal included abroad confidentiality clause (low priority for your business). The vendor readily accepts net-60 but wants to narrow confidentiality to protect their processes. Here's your smart trade: accept their confidentiality language in exchange for securing the payment terms you need.

Parting Thoughts

At Ozeki, we help lawyers and deal teams improve negotiations. Our AI operationalizes all three steps: we analyze past contracts to surface your business priorities (Step 1), provide benchmarking data on counterparty behavior (Step 2), and use deal-mapping to visualize trading opportunities in real-time (Step 3). The result is a contract that reflects the optimal outcome for both parties.

That’s how you turn contract negotiation from an art into a science.

‍