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Negotiating Essential Clauses for Purchase Contracts

Contract negotiation does not necessarily equate to getting the cheapest price.It can also be in terms of quality or service etc. Contracting is defined as a process based on project management plans and developing budget specifications to closeout a contract with a set of document detailing an agreement of legally binding terms. When both parties negotiate they seek to obtain favourable terms whilst minimizing financial, legal and operational risk.

Importance of Negotiation

Every negotiation is unique and requires its own solution; there is a lot that one can learn from encountering other people, trades and situations. By getting to know one another with new information from the negotiation process, constructive discussions can enhance the understanding of both parties and birth mutual respect. In order to be a successful negotiator, we need to practice beneficial techniques in everyday situations.Negotiating successfully goes beyond mastering tactics and strategies.

It is also about having the right attitude and mind set-being diligent in your preparation, planning and specifically thinking through your position and your objectives. Incorrect negotiation can result in an organisation being exposed to risks with costly contractual disputes and financial losses. Thus when doing business, it is important to understand where and how to use your contract to suit particular circumstances.


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Linda Teo Seow Yian, DPSM
Linda Teo Seow Yian has substantive years of experiences in the field of procurement and sourcing, and specifically in the FMCG (fast moving consumer goods) sector. She is a member of the Singapore Institute of Purchasing and Materials Management (SIPMM). Linda completed the Diploma in Procurement and Supply Management (DPSM) on December 2020 at SIPMM Institute.
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