A contract becomes active only when all involved parties agree to the terms and obligations outlined in the contract and sign the document. It usually takes multiple rounds of negotiation between the parties before they arrive at this agreement. The negotiation workflow in Zoho Contracts streamlines the entire contract negotiation process, from initiating negotiations to finalizing the contract with counterparties.

Initiating and Managing Contract Negotiation

The contract owner should initiate the negotiation process once the contract is transitioned from the Draft state to the Draft Complete state (if no approval workflow is associated with the contract type) or Approved state. By default, the primary contact of the counterparty will be added as a negotiator, but the contract owner can add more negotiators as needed, either by selecting existing contacts or adding new ones. 

After selecting the negotiators, the contract owner must assign their permissions. The Write and Submit Review permission can only be assigned to the counterparty's primary contact by default that's non-modifiable, while other permissions such as Write, Comment Only, or View Only can be assigned to the other negotiators. The contract owner also needs to choose the authentication delivery method to share the password with the negotiators. The negotiators will receive an email notification to access the contract document. For a step-by-step guide, see Add Negotiators and Send for Negotiation.

The table below explains the document permissions available in Zoho Contracts.

Note: 

• Only a clean copy of the contract document is sent to the counterparty for negotiation. Therefore, internal discussions with collaborators or comments added during approval in the Comments section of a contract document will not be available to the Counterparty. 
• The contract owner can also skip the negotiation for a contract and send it directly for signature if the contract requires no negotiation. To learn more, see Skip Negotiation.
  

Collaboration and Negotiation Workflow

Negotiators do not need a Zoho Account to view the contract document or suggest edits to it. They can access the document by clicking the link in their email and entering the password. Additionally, negotiators can request the contract owner to add reviewers by submitting the reviewer details, after which the contract owner will be notified and can add the requested reviewers. For a step-by-step guide, see Request to Add Reviewers.

Negotiators can collaborate with other negotiators in real-time by suggesting edits and adding comments, with the option to set comments visibility to Everyone, My Organization Only, or Contract Owner Only. Negotiators can also tag other negotiators or the contract owner in the comments. Any changes made by negotiators will be highlighted as redlining, allowing the contract owner to track edits. 

The table below explains the comment visibility preferences available in Zoho Contracts.

Everyone	The comments will be visible to members of both organizations.
My Organization Only	The comments will be visible to the Counterparty's organization only. By default, the visibility is set to My Organization.
Contract Owner Only	The comments will be visible to the Contract owner only.

Note: The contract owner will be able to view the changes and comments made by the negotiators only after the counterparty's primary contact submits the review.

Once the negotiators have completed their review, the counterparty's primary contact can finish the review, with an option to indicate whether they are ready to proceed for signature.

The contract owner will receive a review summary, which includes details of all changes and comments. 

The contract owner must move the contract to the Draft state to accept or reject the changes suggested by the negotiators. They can also reply to or resolve the comments added by negotiators. After completing the changes, the contract owner must resolve all comments before moving the contract to the Draft Complete state. If an approval workflow is in place, the contract needs approval from the approvers before proceeding with further negotiation rounds.

Note: When the contract owner resends the contract for negotiation after making changes by moving it to the Draft state, the document will be sent as a clean version without any comments or redlining. However, the negotiators can still view the comments with the Resolved status. Internal discussions in the comments section will not be visible to the counterparty.

Finalizing Negotiation and Proceeding to Signature

When negotiations are complete and the counterparty's primary contact selects the proceed for signature checkbox, the contract owner can mark the contract as negotiated and move on to the Signature phase. Any unresolved or unaccepted changes suggested by negotiators will automatically be removed, with a warning alert asking the contract owner to confirm before marking the contract as negotiated.

Additionally, the contract owner has options to remove a negotiator, change the negotiator's permission, and recall a negotiation process. For a step-by-step guide, see Remove a Negotiator, Change Permission of a Negotiator, and Recall Negotiation.