Hi! Managers: Interesting exit clauses

I would imagine some businesses may never recover at all and might have to accept that this could be the end of their business as they once knew it. This brings me to the realisation that every business or working career will one day come to an end. So how would you prepare for such a day. All lawyers know that the main reasons for having contracts and agreements in place are for court litigation. A lot of time is spent drafting these contracts, only to be used one day when the partnership is over and one side feels the need to sue the other. Therefore, smart companies spend as much time as necessary negotiating to ensure both parties agree and are satisfied with the terms and conditions and most importantly the exit clause. It is better to let a deal die rather than make a transaction without complete buy-in.
I remember one experience of negotiating a joint venture contract for over two years for a project which eventually earned Bt10 billion in revenue over five years. During negotiations, the majority of the time was spent on the exit clause. Below are a few interesting exit clauses I have seen that I would like to share with you here.
Buy-Sell concept: This was used in the Pepsi-Sermsuk deal a couple of months ago. In this scenario, when both partners come to a deadlock and cannot agree on how to operate the company, then one party [typically the majority holding partner] will offer to buy out the other party at a specified price. However, if the minority partner is unwilling to sell then they are obligated to buy all the shares from the offering party at the same price. Because the offering party is normally the majority partner who knows the business better, they would know the fair market value to offer. I find this a fair exit method.
Two out of three: In practice when a valuation is required to determine pricing, appointing a valuator can be quite challenging and accepting the valuation outcome is never as straight forward as it seems. In this scenario, each party would chose a desired valuator and the two selected will pick a third. The final price will be determined using the average of the two closes.
Penalise by discount or premium: This method is considered when one partner breaches the contract. It allows the other partner to buy at a discount or sell at a premium. Like the previous example, this also is not black and white as neither party would admit that they are guilty or breached the contract.
All contracts are drafted with one purpose in mind, to give you a level of confidence and a basis to negotiate or find common ground. However, I feel the best way to exit or separate is by simply talking and conversing. All partnerships begin on good terms and it is always important to maintain the good relationships even when it comes to an end. Finally, as a professional I hope to apply this to my own life as well. 

Pratana Mongkolkul is group chief financial officer of Minor International. Follow her article every first Wednesday of the month.