Best practice in negotiations
5 Best practice in negotiations
Best practice
To ensure that contract negotiations are conducted fairly and that both parties fully understand their agreement, the parties should—
provide each other with the following—
a reasonable opportunity to meet and discuss the terms and conditions;
a reasonable opportunity to put alternative offers that suit their own business needs;
sufficient time to properly examine and consider offers and to consult with business partners or fellow directors;
a reasonable opportunity to seek legal, financial or other advice and appropriate assistance to understand documents; and
properly consider any offers made by the other party.
If a hirer has any concerns about a contractor's understanding of a contract, the hirer may request the contractor to provide written confirmation that the contractor has received advice from an appropriately qualified person.
Parties should be clear, open and certain about the circumstances in which their contract will be renewed or not renewed.
Contractors and hirers are also entitled under sections 25 and 26 of the Act to appoint agents to conduct contract negotiations on their behalf. In summary, sections 25 and 26 of the Act—
entitle contractors and hirers to appoint negotiating agents to negotiate contracts on their behalf; and
require other parties to recognise negotiating agents where properly appointed; and
Sch. 1 Pt 2 cl. 5(c) amended by S.R. No. 4/2021 reg. 9(1).
enable parties to require that negotiations be conducted through those agents; and
Sch. 1 Pt 2 cl. 5(d) inserted by S.R. No. 4/2021 reg. 9(2).
do not prevent contractors who were not represented by a negotiating agent from being offered a contract on the same terms and conditions negotiated by the negotiating agent.
Example 5 to Sch. 1 Pt 2 cl. 5 inserted by S.R. No. 4/2021 reg. 9(3).
Example 5
A large construction project involving significant excavation is proposed. This will require Mohammed, the hirer, to engage a number of owner operated trucks. Sarah, who has many years' experience in the procurement of trucks for infrastructure projects, has established a business negotiating agreements between owner operators of trucks and those that engage them.
Paul, Marcelle, Sharon and Cathryn are owner drivers who are keen to be engaged on the project and they engage Sarah as their negotiating agent under the Act.
Sarah successfully negotiates terms that suit Mohammed and the owner drivers. All parties are extremely happy.
Word soon spreads about the agreement amongst other owner drivers looking to obtain work on the same construction project. They wish to be engaged on the same terms and conditions. Mohammed also wishes to use the terms and conditions of the agreement that was negotiated with Paul, Marcelle, Sharon and Cathryn.
The Act makes it clear that the terms and conditions negotiated by a negotiating agent under the Act may be offered to owner drivers who did not appoint the negotiating agent.
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