Individuals get into a business partnership for a few major reasons: They want to grow their business partnership and make a profit. However, changes in circumstances can make an existing partnership agreement untenable. If this happens, and you do not wish to close shop, one of the options you can consider is renegotiating the partnership’s terms.
Renegotiating a business partnership contract can go a long way in improving efficiency while avoiding potential conflicts. So when should you renegotiate a partnership contract?
Generally, three things can trigger a contract renegotiation.
When there is a misinterpretation
Usually, this happens when the financial figures in the contract or offer are inaccurate. It can also happen when new issues that were not disclosed when negotiating the original contract come to light.
When there is a substantial change in circumstance
This can take the form of a sudden change in revenue of market trends. A substantial change in circumstance can impact the affected parties’ abilities to deliver on their parts of the agreement hence the need to renegotiate the contract.
When the contract is outdated or invalidated by new laws
When a contract is outdated, or when there are changes in laws that regulate business partnerships, it may be prudent that the parties consider renegotiating the contract.
Successful partnership renegotiation starts with getting your act together. As such, it helps to study everything you can about the existing contract and the aspects you want to renegotiate. Additionally, be sure to look out for the legal implications of renegotiating the contract.
A contract outlines how business partners will relate and operate their business. Find out how you can renegotiate a business contract that safeguards your rights and interests.