When heading into a contract negotiation, both parties have a shared goal: closing the deal. However, sometimes you may not be able to get what you want out of a negotiation.

At first, it can be disappointing to terminate contract negotiations, especially if a lot of time has gone into the process. But, if you're unable to come to a suitable agreement, it's usually best for you to walk away and find a new vendor to partner with to protect stakeholders and your company's reputation.

One example of a business owner who let go of contract negotiation is Benoit Bassi, managing director of Bridgepoint. After receiving the okay to acquire a fruit-processing company from Pernod Richard, Bassi realized the purchase had the potential to result in significant financial loss, and he walked away from the deal at the very last minute. In the long term, this enabled Bridgepoint to stay in business and remain profitable. 

If you're not sure whether to walk away from contract talks, here are three sure signs it's time to let go of the deal.

1. The Other Party Is Becoming Pushy

A pushy partner is one of the clearest signs it's time to walk away from a negotiation. While both parties need to have their needs met during the deal, this is ideally achieved via mutual respect and compromise. When your vendor becomes too forceful with their agenda, it indicates they may be a difficult business partner to work with in the future. 

2. The Vendor's Culture Doesn't Match Your Own

Your business has a clear company culture and set of values. This culture and your firm's values likely have a large influence over your clients' and customers' decisions to do business with you. 

If you discover your vendor doesn't hold the same political, social, ethical, or moral values, doing a deal with them may jeopardize your business. A culture clash can also make agreeing on business decisions down the line more difficult.

3. You Can't Commit to the Deal Being Requested

It's not uncommon for business owners to agree to terms above and beyond what they can actually honor. You may be tempted to do this if you desperately want to close a deal. But while it may seem like a good decision at the time as it speeds up the negotiation process, making unreasonable promises just sets your business up for failure down the road.

Risks of Accepting a Bad Deal

Walking away from a negotiation is a difficult decision, but accepting a bad deal is far riskier in the long run. Just a few of the risks associated with accepting disastrous terms out of fear include:

• Losing money

• Poor employee retention

• Time inefficiency

• A reduction in your company's reputation

How to Present Your Contract

Ensuring your contract looks great and is presented in a professional way dramatically increases your chances of sealing the deal with your vendor. Therefore, your contract's appearance is critical when going into a negotiation meeting. One recommended tip for flawless contract presentation is to combine PDFs into one file.

Walk Away From Bad Deals

Never settle for a deal with terms that simply don’t work for you. While it may be disheartening to abandon talks, keep in mind that walking away isn’t a failure. It’s a conscious choice to do what’s best for your business.

For additional assistance learning the telltale signs of a bad deal or whether to walk away from a failing negotiation, join your local chamber of commerce.