Due to rising material costs, both parties agreed to renegotiation of the contract terms.

renegotiation 是由前缀 re-（表示"再次"）和 negotiation（谈判）组成的复合名词。negotiation 来自动词 negotiate（谈判），加上 -tion 后缀变成名词。renegotiation 字面意思是"再次谈判"，即"重新谈判"。