Negotiating Umbrella Agreements

Abstract

Experienced negotiators know that it is often impossible to define all terms of a complex agreement. By negotiating umbrella agreements, the negotiating parties try to balance the need for certainty and calculability of give‐and‐take processes with the need to remain sufficiently flexible to embrace new or emerging business opportunities. Umbrella agreements describe a joint consent that explicitly articulates a framework of rules and principles that guides future agreements. It is argued that negotiators are better able to maximize their joint gains if they differentiate between agreements and the framework in which agreements are made.

Inter-cognitive representations in business networks

“…The evidence hitherto is that in the case of a dispute, a neutral judge, arbitrator or mediator will decide the case adopting the contract as an external standard to expresses the reasonable expectations of parties as they are manifested in the contractual agreement (Steyn, 1997). Contracts, however, may build upon understandings that pre-exist as common practice in a particular context and transform them into a framework for managing business relationships (Macneil, 2000;Mouzas, 2006b). For example, as part of a continuing, long-term business relationship, certain delivery patterns may have come to be reasonably expected by partners, and, therefore, they can transform a default rule into a mandatory one over time.…”

Co-evolution of trust and dependence in customer–supplier relationships

“…However, relational contracting does not constitute a legal framework in customer-supplier relationships and therefore unsuccessful relational contracting can end up in opportunistic behavior of the other party. The opportunistic behavior of relational contracting can be prevented, for instance, by umbrella agreement which spells out a flexible framework of principles for future contractual decisions instead of immediate contractual agreement (Mouzas 2006;Mouzas & Ford 2006). Altogether, the awareness of different types of trust-dependence relationships makes it possible to evaluate the organization' s portfolio of customer-supplier relationships.…”

Strategically Managing Negotiation Linkage Dynamics

“…The relationship between past, present, and future (i.e., temporal logic) is well established in the study of negotiation and management (Ancona, Okhuysen, & Perlow, 2001), although little is known about the way that present negotiations are used to influence perceived future negotiations. Agreeing initially on a general framework to guide future negotiations (Mouzas, 2006), precedent-building (Crump, 2007), and forum-shifting in seeking advantage (Drahos, 2007) have each been identified as negotiation techniques that have strategic utility. Each technique aims to link present negotiations to some perceived future negotiations.…”