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The quality of contracts

March 20, 2013

Building on my comments in yesterday’s blog, an example of ‘asking the right questions’ comes from Sidd Mukherjee on the IACCM Forum.

Sid asks whether organizations are assessing and measuring whether their contracts are effective in communicating intent. He comments: “The universal truth is a poor quality contract causes ambiguity, delays the project, and brings in more changes or claims. Hence having good quality controls is important …”

it is an excellent question. Our research into measurements does not suggest that there is any significant activity in this area. There are perhaps indirect measures such as user satisfaction or monitoring cases of claim and dispute (including analysis of underlying causes, which could include poor contract structure or drafting, or ineffective communication).

At IACCM, we are doing a lot of work on the useability of contracts because poor structure or bad wording, including excessive ‘legalese’, clearly do have negative impact. This work is exploring how we ensure the contracting process delivers clarity to users – and this includes not just the original contract, but also the change procedures,

Also, IACCM is introducing a formal assessment process whereby an organization can gain approval for the quality of its contracts with regard to their clarity for users, so this could offer an effective answer to Sidd’s question.

Once more, this offers a great example of the importance of ‘asking the right questions’ and recognizing that in our data-rich age, we really should have answers to some of these fundamental issues.

2 Comments
  1. Tim: I’d be interested to hear what sort of work you are doing on the useability of contracts. In particular, what guidelines are you using to judge clarity?

    And the notion of a formal assessment process raises the same question: by what standards are you judging a contract’s clarity?

    Ken

    • Ken, I’ll be pleased to share details with you. We have established a range of criteria against which judgment will be made – and feedback provided.

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