In a traditional negotiation you may have the Buyer’s bid documents or request for proposals, the supplier’s proposal, with exceptions or assumptions, minutes of each negotiation meeting, etc. While available time is clearly a driver, my preference is to create a clean document that reflects the final agreement. To do that, I put each of the documents under revision control. As items are agreed or taken off the table,
I produce a red-line of each the documents that change as a result of the agreement between the parties. I keeping the originals, and each revision update so I have a record of what was agreed at each point in the process. In the final agreement I include a what’s called a “merger clause” that states that the agreement represents the entire understanding of the parties an super-cedes all prior communications.
The wrong way to do it is to simply incorporate all documents, and rely upon an order of precedence to establish the priority. Using the order of precedence approach only addresses the priority if terms conflict. It doesn’t eliminate additional or different items that are not in conflict. For example, a supplier’s response to a RFP or Bid may have included a number of exceptions, assumptions or addition proposed terms or requirements. The order of precedence will only deal with them if they conflict with a term that has a higher priority. If there is no conflict they become part of the agreement. To eliminate those, you would need to either:
1). Go through all documents to strike out all terms that were not agreed and have all those changes initialed by both parties, or
2) You would need to create a new document that references document and location within the document where it is found and lists what being excluded. That new document needs to be a higher priority that those other documents whose content it is excluding.
