Term and Termination - A Translation

Term.

One of the more clear-cut, "no-duh" contract clauses is the Term of the Agreement clause. Simply put the "Term" of the contract spells out how long the parties intend their agreement to last and should be included in every agreement. 

Being able to clearly identify the duration of a given agreement is essential information to properly managing your deal portfolio. Once the deal is inked ensure that you note the date the agreement ends with some appropriate appropriate reminders that the end is near. This helps you to begin the process of evaluating the deal with enough lead time to make decisions about renewal, renegotiation or shopping around for a new business partner. 

In addition, many Term clauses include "auto-renew" or "evergreen" clauses which allow for the contract to keep renewing unless terminated by one of the parties. The deadlines for terminating auto-renewals is often 60-90 days prior to the actual date the contract renews. If you have the appropriate reminders in place, you greatly reduce the risk of unwittingly continuing an unwanted partnership.

Termination.

This is your exit strategy, that is, how the parties can end their contractual relationship. Generally, you can boil down most types of termination to "for-cause" and "not-for-cause" clauses. 

In the case of "for-cause" termination clauses there can be a wide variety of reasons for ending the agreement. What happens if one of the parties is acquired by a third party? What if one of the parties enters bankruptcy? What if one of the parties breaches a material term of the agreement (such as failing to pay!)? "For-Cause" termination clauses allow you to exit a partnership that isn't working as planned and accounts for some foreseeable events that would make a continued partnership unfavorable.

"Not-for-cause" clauses allow one or both of the parties to wind up the agreement for any reason or no reason at all. Needless to say, that gives the party with the right to terminate without cause some serious power over the relationship. If you are in the position of having a partner with this power, be sure to negotiate a transition period into that decision so that you have enough time to change gears in case your partner decides to terminate early. 

Many business and strategic decisions drive the length of the term and the exit strategies available to either party when entering into an agreement. Just remember - The value of your business (and your life) is the sum total of its deals!

Negotiation Stress

I was talking to a friend recently that is leaving their job for a new one. The hunt for her replacement is ongoing and in a surprisingly logical move the company asked her to describe some traits that would help them find a successful candidate. One of her suggestions that stuck out in my mind was to ask how the candidate deals with stress and to have them cite some specific examples. In her particular field there is a definite busy season requiring long hours and great attention to detail which all adds up to some serious stress. The first candidate they talked to said that they never really have to deal with stress and that in the event that they were stressed out they would most likely try an ignore the problem.  Needless to say, they weren't exactly impressed with that answer.

Similarly, negotiations can often be stressful and having a grasp on what areas drive stress as well as strategies for coping with stress are necessary skills for negotiators. Negotiation has its share of conflict scenarios. Generally speaking you are trying to get the most you can from someone else while giving up the least to get it (a VERY generic definition). These kinds of interpersonal conflicts can be one source of stress. 

Another area of stress is "the unknown." It's really never the things you already know that cause you problems in negotiation. The more information you can gather about an upcoming negotiation, the better you'll be able to cope. If you know what to expect from your counterpart and can nail down a workable schedule in advance, this can go a long way to easing the tension (or at least give you a light at the end of the tunnel). In my experience, a lot of this type of stress is anticipatory in nature. That is, once you jump in and learn what you couldn't know beforehand, things tend to look up.

For some interesting reading on the effects of anticipatory stress on negotiators, check out Kathleen O'Connor & Josh Arnold's SSRN article Fear & Loathing in Negotiation: How Anticipatory Stress Affects Bargainers

Coping with stress is different for everyone and some are much better at it than others. My advice comes down to my experience and generally speaking my coping strategies boil down to three primary outlets: Exercise, Discussion and Brainstorming. 

Exercise: I find that the endorphins from at least 20 minutes of physical exertion don't hurt anything (except maybe my atrophied muscles) when things are not going according to plan. At the very least, you can turn some of that pent up negative energy to good use. This may not be an option for everyone - the key is to find a way to channel pent up negative energy towards a positive, reinforcing activity.

Discussion: Sometimes just talking out the problem helps you get some perspective. I try to stay away from solutions at first since the primary focus for me is exploration. Why did this upset me? Is it the message or the delivery? Are there other outside stressors contributing to the situation? Stepping back from the situation has often allowed me to consider options that never occurred to me in the heat of the moment. 

Brainstorming: Once you've identified problem areas and taken some time to burn off some of that excess energy, it's helpful to start taking concrete steps to solve your dilemma. Brainstorming is a great first step. This doesn't have to be a formalized process (most of my best ideas come while relaxing in a hot shower), but the key is to let your brain tackle the problem without constraints. Not every solution will be feasible, but the whole point of brainstorming is to attack a problem with creative ideas. 

For some further suggestions and reading, check out MindTools Stress Management Techniques page. Lots of great ideas!