How to avoid lengthy negotiations
Despite the natural association of contracts with lawyers, lawyers are not the only individuals involved in the contracting process. Assistants, witnesses, stakeholders and supporting signatories are some of the people who will interact with a contract throughout its lifecycle. However, much of the contract interaction will happen under the supervision of their lawyers, until the contract is finalised and signed. Contract negotiation can sometimes create delays. This article shares tips and best practices for streamlining commercial contracts through contract simplification and contract management platforms.
Why do you need a lawyer to help you with your contracts?
Legal supervision is necessary to ensure that the contract’s terms, and their consequent legal implications, are acceptable and compliant for the contracting parties. For example, liability requirements for one organisation on the contracting table might differ from those of the party at the other side of the table, commonly leading to a renegotiation of the liability clauses. The process of reaching mutually acceptable terms and the appropriate wording of these terms can take time, especially for low value contracts which are not the top priority for the organisation.
Which agreements are often a low-priority for in-house legal teams?
Non-disclosure agreements, new partnership or small sales agreements are often a low priority for organisations because they won't generate significant revenue for the business in the short term. Increasing legal capacity to accelerate the processing time of these low value agreements isn’t economical in the short term. However, in the long term, business relationships might not be explored and opportunities may be lost due to the hurdle of processing and negotiating the key terms of these contracts.
How to simplify agreements?
Contracts are not typically user-friendly either because the contract language is complicated or because the structure is not easy to process. Contract language can be simplified by avoiding legalese and legal jargon. Sentences can be written in plain English so that legal rights and obligations are easily understood. The terms of a contract are highly connected which means it is important to choose a contract structure and headings which organises the terms so that they are grouped by theme and not too dispersed between sections to avoid unnecessary cross-clause referencing. Good contracts are typically structured in a logical order so that they are easy to understand. This approach to simplifying the format and structure of agreements can be applied to all legal documents, including complex contracts.
Curious about automated data extraction from documents?
How to streamline low priority agreements?
Contract simplification is only useful if the contracting process is efficient. Low value contracts should be simplified so that the terms will most likely be mutually acceptable to all contracting parties. This means that little to no negotiation should be required for these agreements. A delegation framework which lawyers can trust should then be developed to enable their contracting colleagues to create and negotiate the terms of their agreements without their permanent supervision. This framework should be simple enough for non-lawyers and offer reasonable flexibility within pre-approved bounds to minimise error and save time. This will also free up the legal team as they will spend less time answering questions related to these low priority contracts.
How contract management can help simplify legal workflows
After simplifying legal documents and establishing a delegation framework, contract management software can help automate the contract creation process and enforce compliance so that business people can create contracts which meet the legal team's requirements. Contract management software stores company approved templates which can be configured into contracts which are tailored to the requirements of the contracting parties. Business contracts generated by a contract management platform contain fewer mistakes, provide an audit trail of the contract negotiation process and offers a better user experience for everyone involved in the contracting process. Contract documents are also easier to manage and search using contract management software which makes it easier for the legal team to monitor their responsibilities and obligations without having to get involved in the actual contracting process for low value agreements.
Legislate is a contract management software platform which provides a suite of robust and fair contracts which can easily be created by non-lawyers. Once the contract is configured on Legislate, parties can be invited to accept and sign on the platform. This streamlined process means that contracts are signed faster and business opportunities pursued sooner. Distinctively, Legislate is built on a knowledge graph which unlocks contract data and insights which previously would have been trapped in a word or pdf document.
The opinions on this page are for general information purposes only and do not constitute legal advice on which you should rely.