The tendency to assume that each contracting party has antithetical objectives creates a toxic relationship, often making dispute resolution almost impossible outside a courtroom. There are often no clear winners in litigation. Yes, one party may win in court. But frequently the expense of settling a contract dispute in court and the potential damage to long lasting business relationships can muddy the waters of a clear victory.
It is far better to approach a request to renegotiate a contract as an opportunity to improve the situation for both sides, to turn a certain loss by both into potentially a win-win, new beginning. Every attorney worth their salt recommends an attempt at renegotiating a contract before litigation.
“The dynamics of renegotiating an existing agreement are quite different from hammering out a deal from scratch.” Jeswald Salacuse, Real Leaders Negotiate!
The situation in which the two parties find themselves may be the result of a Covid-19 –like event but also reflects the omission in the initial contract to establish a process for regular review and adjustment. Whether good times or bad, circumstances and conditions for all people and organizations continuously change. What worked yesterday may be inconsequential tomorrow and debilitating the following year.