You're listening to Business English Pod, the business English podcast for professionals on the move.
Hello, and welcome back to Business English Pod.
My name is Adelie, and I'll be your host for the second part of our look at negotiating a contract.
So, you've found a company you want to work with and have agreed on the major points of the deal.
Now it's time to negotiate the fine print or the details of the contract.
Even if you've come to terms on price and payment, there may be a lot of costs or savings unaccounted for.
A good warranty, for example, could save you a lot of money.
The details may not break a deal, but you do need to negotiate them successfully so that the contract protects you and guarantees you certain benefits.
To do this, you'll need to be comfortable with the language of contracts and the techniques used to talk about them.
And that's what we'll be looking at today.
We'll learn how to ensure warranty terms, ask about response times and talk about the bottom line in order to win concessions.
We'll also cover talking about renewal and agreeing to overall terms.
We are going to rejoin Sam and Larry, who are discussing a contract to lease a fleet of cars and vans.
Larry, who represents the vehicle company, has drawn up a contract.
He and Sam are discussing the details over the phone.
You'll hear Sam try to get the best deal possible for his company.
As you listen, try to answer the following questions.
1.
Why does Sam want to ensure the terms of the warranty?
2.
What does Larry offer to Sam free of charge?
3.
How does Larry respond to Sam's request for a renewal clause?
Okay.
I understand that the vehicle is under factory warranty for the entire duration of the lease, right?
Of course.
And you've agreed to cover routine maintenance.
I mean oil changes and such, right?
Yes.
That should all be in there.
Great.
Really have to get our costs down here.
Now, you guys talk service a lot.
What is your standard service response time?
I mean, if we've got an issue with a van and we need some help, how long are we going to have to wait?
Great question.
As long as it's within our standard service radius, which is pretty much anywhere in the greater Cleveland area, we can guarantee a recovery vehicle will be out within two hours.
I see.
Because we do some pretty time-sensitive work.
And I'd hate to see us lose business or customers because we've got a guy stuck on the freeway with a problem.
Of course.
Listen, we'll throw in the priority package for you.
It's usually 500 bucks a month for larger fleets, but I think we can do that for you.
All right, then.
I appreciate that.
I like what's happening here, Larry.
But I do want to make sure, I mean if we actually agree here, that these terms will hold.
I'd really like a renewal clause that gives us the same terms that we're talking about now.
I understand where you're coming from, Sam.
But I've got to be honest with you.
A renewal clause like that is just shooting ourselves in the foot.
We're talking a three-year term.
There's just no way we can guarantee the exact same deal three years from now.
Well, that's unfortunate, but I suppose you've got a point.
Okay, then.
I think that pretty much does it for my major concerns.
We might have to cross a few T's and dot a few I's in the final document, but are we good with the key pieces of this deal?
Yes, Sam.
I think all the big stuff is in there.
I'll do up the changes we talked about and get you another draft tomorrow.
Now let's go back through the dialogue and look at the language Sam uses to discuss the details of the contract.
Okay.
I understand that the vehicle is under factory warranty for the entire duration of the lease, right?
Of course.
And you've agreed to cover routine maintenance.
I mean oil changes and such, right?
Yes, that should all be in there.
Sam begins by mentioning the warranty, one of his major concerns in the contract.
First, he confirms that the vehicles are under factory warranty for the entire period or duration of the lease.
In other words, problems with the vehicles will be fixed at no cost to Sam's company.
For confirmation.
Sam makes a statement followed by the tag question.
Larry says to indicate that this is true.
Next, Sam wants to ensure that Larry has agreed to cover, or include, routine maintenance.
These are things that are often not included in a regular warranty.
Again, Sam uses the tag question, right?
And again, Larry confirms that the contract includes this previous agreement.
Ensuring warranty terms, like Sam is doing here, is essential.
Repairs and replacement can cost a lot of money, and a contract should state clearly who will pay for what.
Let's listen to some other ways we can ensure warranty terms when negotiating a contract.
So, what exactly does the warranty include?
I want to be sure that the warranty covers maintenance.
Let's go over what's covered by that warranty again.
Okay, let's return to the dialogue.
Great.
Really have to get our costs down here.
Now, you guys talk service a lot.
What is your standard service response time?
I mean, if we've got an issue with a van and we need some help, how long are we going to have to wait?
Sam is pleased to hear about the warranty terms because, as he says, they have to get their costs down.
This is just another way of talking about reducing costs.
Sam's next concern is standard service response time.
Notice how he introduces this by mentioning that Larry's company talks about service a lot.
He wants to make sure Larry follows through on this.
Sam clarifies his question by describing a specific situation.
He wants to know very specifically how long they'll have to wait if they have a problem with a van.
In a service agreement, response time is key.
If you rely on a machine, vehicle or other piece of equipment for your business, you can't wait a long time for service.
How else can we ask about response time?
Here are a few more examples.
When we have a problem, how long will we have to wait for service?
How long of a wait can we expect on a service call?
Can you tell me about your guaranteed service response times?
How soon will you have a truck out if we run into problems?
Let's hear how Larry responds to this concern about service response time.
Great question.
As long as it's within our standard service radius, which is pretty much anywhere in the greater Cleveland area, we can guarantee a recovery vehicle will be out within two hours.
I see.
Because we do some pretty time-sensitive work and I'd hate to see us lose business or customers because we've got a guy stuck on the freeway with a problem.
Larry is happy to state that they can guarantee or promise a recovery vehicle within two hours, though he does make sure to explain that the guarantee applies to their standard service radius, which is the area they normally serve.
But Sam thinks there is room for improvement on this point.
He doesn't come out and say this directly, though.
Instead, he talks about the bottom line.
He mentions that some of their work is time-sensitive, which means it can't be delayed.
And he says he'd hate to see them lose business or customers because of a problem with one of the vehicles.
By talking about the bottom line, Sam is emphasizing just how important that service response is.
And in this way, Sam hopes to win a concession.
What are some other ways we can talk about the bottom line to win concessions?
Time is money, and we can't afford to lose either.
If those computers go down, we'll start losing money right away.
Any breakdown is going to impact us financially.
To serve our customers and make money, we need these things to work.
Now, let's see if Sam's negotiating strategy works.
Of course.
Listen, we'll throw in the priority package for you.
It's usually $500 a month for larger fleets, but I think we can do that for you.
All right, then.
I appreciate that.
I like what's happening here Larry, but I do want to make sure I mean, if we actually agree here that these terms will hold.
I'd really like a renewal clause that gives us the same terms that we're talking about now.
Larry responds to Sam's concern by offering their priority package or an enhanced level of service for free.
And he says, I think we can do that for you, to make Sam feel special about this concession.
But the negotiating doesn't stop there.
Sam tries again.
First, he shows his appreciation and says that he likes what's happening.
This sets a positive tone before he goes on to his next request.
He hopes that the terms of their agreement will hold or continue unchanged in the future.
"'I'd really like a renewal clause,' he says."
Renewal is an important contract consideration.
You need to know what your options are at the end of the agreement.
Let's practice some other ways to discuss the renewal of a contract.
Once the contract is up, what happens then?
After the two-year period, will we be able to extend the contract?
I'd like to talk about renewal terms for a few minutes here.
Does Larry give Sam the renewal clause he's looking for?
I understand where you're coming from, Sam.
But I've got to be honest with you.
A renewal clause like that is just shooting ourselves in the foot.
We're talking a three-year term.
There's just no way we can guarantee the exact same deal three years from now.
Well, that's unfortunate, but I suppose you've got a point.
Okay, then.
I think that pretty much does it for my major concerns.
We might have to cross a few T's and dot a few I's in the final document, but are we good with the key pieces of this deal?
In negotiation, we can never get everything we want.
And in this case, Larry rejects Sam's request.
But he does so with tact.
Larry says he understands where Sam is coming from, but that he's got to be honest.
That's his way of introducing the fact that the renewal clause is impossible.
As Larry says, it would be shooting ourselves in the foot or doing something damaging to his company.
Sam calls this unfortunate, but doesn't press the issue.
He says, with some hesitation, I suppose you've got a point.
Sam has no other requests, though he acknowledges that there may be some minor details to take care of.
In his words, they might have to cross a few Ts and dot a few Is.
But with his major concerns taken care of, Sam wants to agree to the overall terms of the arrangement.
He does this with a question, asking Larry if he's good with the key pieces of the deal.
Now listen to some other examples of agreeing to overall terms at the end of a negotiation.
I think everything else here looks great.
All in all, I think this arrangement is going to work just fine.
There may be a couple more details, but overall the contract is great.
Those were my big concerns, and I think we're pretty much ready with this.
So, is Larry good with the overall terms?
Yeah, Sam.
I think all the big stuff is in there.
I'll do up the changes we talked about and get you another draft tomorrow.
Larry confirms that the major terms are taken care of and offers to make the changes he's discussed with Sam.
Now let's practice some of the language we learned in today's lesson.
We're going to start with a role play practice.
You'll play the part of an office manager leasing some vehicles for your company.
You're going to talk to a sales rep from a vehicle leasing company about a contract.
You'll need to start by ensuring warranty terms.
Then you'll ask about response times and highlight your bottom line to win concessions.
You'll also talk about renewal and agree to the overall terms.
At each step, you'll hear a cue given by the sales rep.
Then, I'll give you some suggestions for the language you can use to respond.
We'll guide you through each step in the practice and play an example for each response.
Ready?
Let's give it a go.
Okay, is there anything else you'd like to address?
Respond by asking whether the warranty covers oil changes.
Example answer.
Yes.
Does the warranty cover oil changes?
Yes, it does.
It covers most regular maintenance and all parts.
Now ask the manager how long their usual service response time is.
Example answer.
Okay, and how long is your usual service response time?
We'll have someone out to you within six hours.
Guaranteed.
Now tell the manager that a six-hour wait is going to cost your company a lot of money.
Example answer well, a six-hour wait is going to cost us a lot of money.
I may be able to get that time down for you.
Is there anything else you're concerned about Now?
Ask the manager whether you have the option to renew after two years.
Example answer.
Do we have the option to renew after two years?
Yes, you can extend for one year, then we renegotiate. now say that you think that overall you are happy with the contract example answer okay well overall we are happy with the contract Now let's practice useful vocabulary and idioms.
You'll hear a series of sentences with a word replaced with a beep.
Repeat the whole sentence, including the missing word.
For example, if you hear... You can say...
After each response, we'll play the correct answer.
Let's begin.
Answer.
We really need to find a way to get our costs down.
We are having far too many with our photocopier.
Answer.
We are having far too many issues with our photocopier.
We have agreed to a deal for a... of three years.
Answer.
We have agreed to a deal for a duration of three years.
The monitor was only under...
Answer.
The monitor was only under warranty for a year.
We've reached the end of this episode, the second in our two-part series about negotiating a contract.
We've learned how to ensure warranty terms, ask about response time and talk about bottom lines to win concessions.
We've also looked at talking about renewal and agreeing to overall terms.
Keep these language techniques and tips in mind and you'll have a much better chance of coming out of your next negotiation with a great contract.
Thanks for listening and see you again soon
