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Assessing and Negotiating Commercial Contracts


  • Jan Vlachý

    () (Czech Technical University, Prague)


This paper investigates the process of evaluating and negotiating commercial contracts using value-based models. First, contractual assets are defined and related to a comprehensive firm-theoretical background. Several simple valuation models for contracts are then derived and applied, using an option-theoretical background and particular case examples. Quantitative criteria are thus introduced, that can be used as a management toolkit to assist in negotiation, as well as for various corporate valuation purposes by e.g. auditors, appraisers or M&A specialists. Due perspective is given to various contractual asymmetries, which seem to be of considerable importance in the process of negotiation, and may have substantial valuation impacts.

Suggested Citation

  • Jan Vlachý, 2010. "Assessing and Negotiating Commercial Contracts," Romanian Economic Journal, Department of International Business and Economics from the Academy of Economic Studies Bucharest, vol. 13(37), pages 143-163, September.
  • Handle: RePEc:rej:journl:v:13:y:2010:i:37:p:143-163

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    References listed on IDEAS

    1. Manuela Goretti, 2008. "Wage-Price Setting in New EU Member States," IMF Working Papers 08/243, International Monetary Fund.
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    More about this item


    contractual assets; asset valuation; value-based analysis;

    JEL classification:

    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty
    • G13 - Financial Economics - - General Financial Markets - - - Contingent Pricing; Futures Pricing
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics


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