This sets out a standard sequence for negotiating a commercial contract, whether you are receiving the other side’s draft or issuing your own.
Step 1 — Establish the actual deal before the paperwork
Confirm commercially what has been agreed — price, scope, timeline — before getting into clause-by-clause negotiation, since negotiating legal terms on top of an unclear commercial deal wastes time on both sides.
Step 2 — Read the whole draft once before marking it up
A first read for overall structure and risk allocation, separate from the detailed markup pass, catches issues that get missed when reviewing clause by clause from the start.
Step 3 — Prioritise the risk-allocation clauses
Liability, indemnity, termination and dispute resolution matter more than boilerplate. Spend negotiating capital there rather than on formatting or minor wording preferences.
Step 4 — Track changes and the reason for each
Keeping a record of what was changed and why avoids re-litigating the same point in a later round, and is useful evidence of the parties’ intent if a dispute arises later.
Step 5 — Confirm execution formalities before signing
Confirm who is authorised to sign for each party, and that the signed version matches what was actually negotiated.
What to do next
Bring the current draft and a note of what has already been agreed commercially, so negotiation time is spent on what actually matters.