The Guide to Upfront Contracts with Real Examples

Estimated reading time: 9 minutes

What is an Upfront Contract?

The Four Components of an Upfront Contract

1. Competency

• The salesperson must have the authority to make and fulfill the offer.
• The prospect must have the ability to accept and fulfill it.

2. Mutual Consent

• The salesperson offers to do something.
• The prospect accepts your offer.

3. Explicitly Communicating the Offer

• There can be no doubt about what you offered the prospect.

4. When Prospects Breach the Upfront Contract

• It can be tough to pull back your side of the offer and risk losing the deal.

Important Note: an offer includes both the salesperson and the prospect agreeing to do something.

Effective Use of Upfront Contracts in Negotiations

My team uses Upfront Contracts whenever we negotiate price and terms with a prospect. We typically state that we can provide the discount as long as our Agreement is signed by a specified date. This helps us maintain control over the sale, shorten our sales cycle, and ensure that the sale actually happens (time kills all deals).

We sell an emerging product where our prospects typically lack a planned budget and urgency (see: Thinking vs Feeling). So leveraging Upfront Contracts in negotiations has been incredibly powerful for us.

1. Competency

A common mistake that salespeople make is that they offer discounts with a deadline that the prospect couldn’t possibly meet. You must ensure that your prospect can accept and fulfill the Upfront Contract.

Upfront Contract Example: One of my Account Executives was new to Upfront Contracts and got a lot of quick wins while using them during negotiations. While riding this win streak she got a little too bold (and excited) when a prospect asked for a discount. She said she could provide the requested discount if they signed today. Our prospect ‘agreed’ but said they’d need to connect with their VP. We sell to Enterprise customers. There was about a 0% chance of them being able to sign today. The prospect then went radio silent for a few weeks. They didn’t have competency.

2. Mutual Consent

Ensure that your prospect firmly agrees to your offer. Get a “Yes” or a “No” – not a “Maybe”.

Ensure that you get an explicit “Yes” from your prospect before confirming that you can do something. This ensures that you maintain your leverage.

A common mistake salespeople make with Upfront Contracts is not clarifying the customer’s ability to fulfill their side of the agreement first (competency). They immediately offer concessions like discounts and specify terms without ensuring alignment on the customer’s commitments (mutual consent).

When salespeople offer concessions prematurely, such as stating a discount amount, they lose valuable leverage in the negotiation process. By not confirming the customer’s readiness to commit to the terms (e.g. signing by a specified date), they give up control over the negotiation dynamics.

Upfront Contract Example: If your prospect asks for a discount, always ask one of these two questions before providing the discount:

• “When is it achievable for you to sign the Agreement?”or
• “Is it achievable for you to sign the Agreement by <specific date>?”

Once they have given you a “Yes”, you can explicitly state that you will provide the discount and specify the terms.

3. Explicitly Communicating the Offer

Oftentimes salespeople aren’t assertive in their offers and asks. They use wishy-washy language that leads to mutual mystification. This can lead to a misalignment, misunderstandings, and differing expectations between the salesperson and their prospect. Your prospect cannot accept your offer if they don’t understand it.

4. When Prospects Breach the Upfront Contract

Prospects will often test you to see if you’ll stand firm. They’ll ask for exceptions, push deadlines, and see if you’ll flinch when it matters most. Upfront Contract only works if you’re willing to enforce it.

Here’s one of my favourite Upfront Contract examples: the biggest deal in company history… and a Q2 buzzer beater.

I provided a 5% discount to a prospect but only if the deal was signed by June 30th, the final day of Q2. It would be the largest deal our company had ever closed. And honestly, I needed it to close. We were behind target, and this deal would make or break our quarter.

Then June 30th rolled around… and we still didn’t have a signature. I followed up with the prospect, and what happened next tested everything I believe about standing firm with Upfront Contracts.

Receiving a last minute extension request like this is where most sellers fold. Why? Two big reasons.

First, disruptive emotions take over. Fear creeps in. They panic that pushing back will cost them the deal.

Second, they take the prospect’s word at face value. When a buyer says, “I won’t be able to sign today,” it sounds reasonable. Most excuses from prospects sound reasonable. But I’ve learned to look deeper and see through them.

In this case, it was the Friday before a long weekend. My read? Procurement didn’t want to hassle their team or stay late. It was easier for them to ask me for an extension. And honestly, I bet 99% of sellers would’ve given it.

But I only play to win.

Are there times I make an exception? Sure. But they’re rare. My default is always to stand firm when an Upfront Contract is tested.

I stood firm. I said I couldn’t extend the discount. Instead, I pivoted to offering help to get the deal done. This reinforced that I was serious. 

It was 1:11pm on Friday June 30th. Right before a long weekend. The last day of my quarter. The biggest deal in company history was on the line. 

I was playing to win.

And what happened next?

The ‘unexpected’ happened. 

We went from “I can’t” at 1:07pm… to “Success!” by 2:09pm. 

But it wasn’t really that unexpected. When I stand firm on Upfront Contracts, I’d estimate I win 80-90% of those scenarios.

Most prospects don’t need to breach. They just want to see if they can. If you stand firm, they’ll usually find a way to get the deal done.

Why do they try to breach? Because it’s hard. It’s hard to rally internal approvals. Hard to get Legal and Procurement moving. Hard to hit tight deadlines. They may have to put in extra hours and burn political capital calling in favors or escalating internally. Especially in large Enterprise orgs. Asking for an extension is often just… easier.

At 5:11pm on Friday June 30th, I received the DocuSign for signature. 

Done deal. Biggest deal in company history.

At a team offsite in the Dominican Republic the next week, my Co-Founder asked me:

“How do you have the guts to say No to them? Weren’t you afraid of losing the deal?” (the “them” being a massive Enterprise customer).

I wasn’t. Because when I set an Upfront Contract, I commit. And when a prospect tests it, I hold the line. That’s the default. There is no other choice.

And I only play to win.

How to Set An Upfront Contract

Here’s a step-by-step breakdown of how to properly set an Upfront Contract using real email examples.

Step #1: Prospect Request

• When your prospect makes a request (e.g. a discount), it’s an opportunity to set an Upfront Contract.

Step #2: Determine Your Reciprocal Ask

• Your prospect has asked you for something. Think about what you want in return for fulfilling their request. You and your prospect need to have a reciprocal relationship. What is your Reciprocal Ask going to be?
• Example: your prospect wants a discount. You want the deal to close this month. Your Reciprocal Ask should be “can you sign this month?”.

Step #3: State Your Reciprocal Ask

• State your reciprocal ask and confirm their ability to fulfill it. You need to check for competency.

• Common Mistake: Many salespeople skip establishing the prospect’s ability to fulfill the reciprocal ask first. They offer concessions like discounts without confirming that the prospect can fulfill their side. This puts the salesperson in a weak position.
  • When you offer terms before securing commitment, you lose leverage and risk entering an open-ended negotiation. Instead, ask the customer if they can meet your condition first and then state your offer.
  • Example:

Step #4: Receive a “Yes” on Reciprocal Ask

• Example: prospect says, “Yes, I can sign this month.”

Step #5: Say “Yes” to Prospect Request

• Example: salesperson replies, “Great. We can provide a $5,000 discount, if the Order Form is signed this month.”
• Note: the discount should only be offered upon receiving a clear “Yes” from the customer.

Wrapping Up

Upfront Contracts are one of the highest-leverage tools in sales but only if you’re willing to enforce them.

Many salespeople struggle to set them assertively and fold at the first sign of pressure. They panic, they bend, and they lose control of the deal. But the salespeople who master the Upfront Contract? They earn trust, drive urgency, and close deals with control.

Set the Upfront Contract. Stick to it. And play to win.