A good agreement is one which leads to successful implementation. There are many examples of firms getting into trouble because they could not implement the contract conditions of a particular deal. Therefore, in some cases, no agreement may be a better outcome for the firm. A good outcome benefits both parties and does not make either party feel that it has a less advantageous contract. Sometimes negotiators want to avoid specifying some issues and want to keep them ambiguous.
It is important to understand that on the one hand, ambiguity can lead to reopening of the conflict later on, in the implementation stage, and on the other hand, if we want to specify such issues, it might prolong the negotiation process or prevent an agreement. Sometimes, this ambiguity is unintended, whereas, on other occasions, it is intentionally deployed to speed up the process or to give the impression that the particular issue needs to be re-negotiated (Ikle 1964).
It is normally considered that a good business deal is one which provides financial gains. But what were the objectives of the firm when it decided to enter into negotiations? Was it the present deal which was most important or was it future business? The outcome must be related to the firm’s objectives. If the objectives have been met then it is a good outcome. A successful negotiation is not a question of “win-lose” but a problem-solving approach to a “win-win” outcome.
The main purpose of the contract is to avoid misunderstandings and trouble in the future. The agreement should foster relationship development and be flexible enough to deal with expected or unexpected future changes. The language and terminology used in the contract must be simple and clear. It must not be necessary to seek legal help every time the contract is consulted.