The NDA Test, the Contract Trap and Why Relationships Win Deals
In complex organizations, the outcome of a deal is rarely determined by the contract alone. It is determined much earlier — by alignment, by judgment and by whether the relationship is leading the process or following it.
Over the years, I’ve negotiated deals with large companies (including leading mobile service providers), small companies, and startups in the North America, Europe and Asia. I’ve sat on both sides of the table (not at the same time) as a service provider, as a customer and representing clients.
Whether commercial or strategic, I treat every deal as strategic. Whenever possible, I embed strategic elements directly into the structure.
My early career as a business lawyer taught me something important: the real value is not in drafting agreements — it is in finding workable terms and using my legal training to resolve business issues that initially appear unsolvable.
A few lessons learned:
1. The NDA test.
When a counterparty seeks to renegotiate every provision of a standard NDA — aside from term and jurisdiction — it often signals a difficult path ahead. Conversely, a prompt and practical turnaround is usually a positive sign.
2. Contract length is a tell.
When working with large organizations, particularly mobile service providers, the likelihood of closing a deal is inversely related to the length of the proposed agreement. Excessive length typically reflects internal complexity, layered decision-making and a process driven more by legal mechanics than business leadership.
3. The Handshake comes first.
A constructive and open business relationship should precede drafting the legal agreement. Chemistry matters. When the contract leads and the relationship follows, outcomes are rarely favorable.
Long-term success depends far more on the strength of the relationship than on the legal document memorializing it. And relationships, like long-term investments, require continued attention. Good deals unravel when principals fail to nurture the partnership that made them possible.
4. Lose the LOI.
Unless a financing requires evidence of engagement, a Letter of Intent is typically a non-binding expression of interest and thus unnecesary. In many cases it includes few material terms and creates more friction than clarity.
LOIs can signal intent, but they often consume time negotiating language that ultimately has no binding effect. I prefer a concise, one-page term sheet outlining key commercial and strategic elements. Once aligned, that framework can be turned over to counsel to draft the definitive agreement.
In the end, durable agreements are built on judgment, trust, alignment of interests — and of course, a construct that makes business sense. The contract confirms the agreement; it does not create it. Those managing the relationship must understand their obligations clearly and treat them as foundational.
Performance over time, however, is driven by something more enduring: mutual confidence, consistent communication, and sustained executive sponsorship. When the relationship is strong, the agreement functions as intended. When it is not, no amount of drafting will compensate.
Successful deals are driven by relationships, not contracts.
The views expressed here reflect business insights from my career in Corporate Strategy and Development. They are shared for your information and do not constitute legal advice. If you are negotiating or entering into any agreement or business arrangement that may bind you, your client or your company, you should consult qualified legal counsel for advice specific to your circumstances.
