Seven Secrets for Negotiating with Government: How to Deal with Local, State, National, or Foreign Governments—and Come Out Ahead

THE DEAL IS NEVER DONE 171

clauses that have yet to be tested in the courts are additional fac-

tors that have deterred their use in long-term contracts.

Despite these potential pitfalls, the inclusion of a renegotiation

clause may actually contribute to transactional stability in certain

situations. First, in cases in which significant changes in circum-

stances may result in severe unexpected financial hardship, a rene-

gotiation clause may permit the parties to avoid default, with the

attendant risk of litigation and extra-deal renegotiations. During

the original negotiations, it may be wiser for the parties to recog-

nize the risk of changed circumstances ...