Renegotiating signed deals

As a business owner you will be required sign hundreds of contractual agreements with suppliers, customers and shareholders. But what happens if circumstances change and you want to get out of a contract?

Surely that’s not possible without breaking the law? Well, according to some business leaders, not only is it feasible, it’s commonplace.

‘Renegotiating a signed deal is absolutely possible,’ assures Steve Burns, founder and CEO of online publisher Totally, although, revealingly, he is unwilling to provide specific details of his experiences in this area. ‘The circumstances of business can quickly change so you need to be flexible.’

Change brings mutual benefit

Company directors should always have an eye to the future and be careful about what they put their name to. But, contrary to what you might think, not all contracts are as watertight as they seem and, in many circumstances, a co-signee of any agreement may well be willing to change terms to maintain the relationship, or because they badly need your goods or services.

‘Any agreement requires both people to be happy,’ explains Burns, ‘so if one party isn’t, something needs to happen, preferably a renegotiation of the deal as opposed to letting the relationship break down entirely. As long as you can find a win-win situation for those involved then you can work it out. And I think that’s something the majority of business people understand.’

If you’re signing very complicated agreements or contracts worth large sums, you’ll probably have to bite the bullet and pay for legal advice. Stephen Pearne, partner at law firm Pearne & Co, agrees with Burns’ view that ‘most parties want a contract to work, however that can be achieved.’ Pearne confirms that ‘all deals are renegotiable’, but that it largely depends on the bargaining power of the parties involved. He adds, ‘If you are trying to renegotiate on pricing, there is often a quid pro quo involved – if you are unhappy with the price we have agreed and want it cheaper then I might renegotiate for a higher volume of orders from you.’

Start right to save time

Although you may be able to change the terms of a signed agreement, don’t assume the other party will be willing to renegotiate favourably towards you. Sally Ray, director of satellite communications service provider NSSL, warns not to sign a contract unless you’re as sure as possible you’re going to be happy with it going forward. NSSL deals with major global organisations, so each deal is bespoke and may cover many years.

‘It is essential that we get our contracts right in advance as we would very rarely want to get embroiled in having to renegotiate,’ she says. ‘Longevity in client relationships is important to us and that means having clear and transparent agreements from the outset.’ One possible solution is to incorporate clauses into a contract that allow for renegotiation of certain terms in the future, especially those subject to market conditions.

Cunning renegotiation tactics

If you are renegotiating, lawyer Pearne warns you should make sure the other side don’t try to sneak amendments in through the back door.

‘If you’re renegotiating over price, for example, the other party might try to put in a clause about exclusivity,’ he says. ‘If you’re amending an existing contract, be very careful that the only changes made are ones you know about.’

And, of course, changes you’ve agreed informally over coffee or in the pub won’t be legally enforceable unless they’re documented.

Should your circumstances change, the worst-case scenario would be that the other party in the deal stands firm and refuses to renegotiate. Facing the prospect of being stuck with an unsuitable contract to fulfil, you may be tempted to seek the skills of a cunning lawyer to find a reason for the contract to be invalid. In reality, though, that’s a costly process unlikely to bring about the result you want. Ultimately, if the agreement is between parties with close business ties, getting a lawyer involved may sour a valuable commercial relationship that could be worth more to you in the long run, in renewed contracts, than the specific terms you’re trying to renegotiate.


  • Be careful what you sign in the first place – is the contract future-proof?
  • Add clauses allowing you to renegotiate any terms that are subject to market conditions
  • Think about what you are willing to give in return for renegotiating a set of terms in your favour


  • Jeopardise a valuable ongoing business relationship for the sake of a few technicalities
  • Assume changes you’ve agreed informally will be legally enforceable if not documented

See also: Perils and pitfalls in negotiating commercial contracts

Marc Barber

Marc Barber

Marc was editor of GrowthBusiness from 2006 to 2010. He specialised in writing about entrepreneurs, private equity and venture capital, mid-market M&A, small caps and high-growth businesses.

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