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Change does not have to be complicated

July 21, 2014

Sometimes it can be so simple to achieve change.

Last week, I was talking with John, an IACCM member, about contract drafting and its impact on business results. We started also to discuss contract structure and its effect on ease of use – and at that point he came up with an interesting story.

John’s company undertakes a variety of complex services. He explained that the definitions section of their agreements is typically quite long and was regularly taking up to one and a half days to negotiate. This cut into the time available on the more substantive areas of the contract and regularly resulted in important issues being rushed.

Then, someone suggested moving the definitions to an appendix at the back of the agreement, rather than as part of the introduction. And sure enough, it worked. By the time the parties reached ‘Definitions’, they were already comfortable with the substance of the agreement and had a shared context for the definitions. So effort was saved and substantive issues were resolved.

Some of the most effective changes are also the simplest. Its just a matter of watching out for examples of inefficiency or ineffectiveness and then trying to identify a different approach. Contracts are especially in need of some innovative challenges.

One Comment
  1. Eugene P. Grace permalink

    When drafting contracts, I remember three simple principles: the contractual documentation should be easy to read, easy to understand and easy to sign. The contract structure is a critical factor in satisfying these three principles. A great example is that legal language and business terms should not be intertwined. Essentially, the text of the agreement should include the legal terms and business terms should be placed in the schedules/exhibits, e.g., description of product/services, fee schedule, implementation schedule, maintenance etc. In my experience, the intertwining of legal and business terms will result In increased negotiating time and expense.

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