Digital systems answer questions using rules and facts. However, a system can only use facts to answer questions if they are structured and organised. Facts stored in a contract such as the start date or term are buried in sentences and clauses which can't be easily parsed or interpreted by machines. A database stores facts and organise them in separate entities using a schema. Since documents are not usually standardised it has traditionally been difficult to parse document data and store it in databases. As a result, contracts and the data they contain are not typically queryable. This article explains how queryable contracts can become a reality and the value your business can unlock from open contracts and contract data.
What is a query?
A query is a request to a database. A database organises information in a structured way so that it can be queried. For example, a spreadsheet is a type of database which organises information in a predefined table. Different types of databases exist to store different types of data and different query languages exist based on the nature of the database you are querying. To query data from a database you will therefore need to define a query which answers your question. For example, a query to fetch contracts with a liability clause could be written in pseudo code as "SEARCH *Contracts WHERE clause contains liability". What you are able to search with your query will depend largely on the nature of the information you searching for and if it can be stored in your database.
Why is contract data hard to query?
One of the reasons why traditional contracts are not queryable is because they are not machine readable. Documents and contracts are often stored in formats such as a pdf where machines interpret the content as an image of text instead of as native text which can be parsed into strings. As a result, the pdf format is not a suitable technology if you wish to access document data. Moreover, contract data can sometimes be hard to interpret for machines and organise under a common schema due to its tangled nature. As a result, the performance of contract queries is usually poor.
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How can smart contracts be queried?
Smart contracts are contracts which are machine readable and can therefore be queried. Different methods exist to make contracts machine readable. The first is to teach the machine how to read documents and the second is to make the facts in the documents easy to read for machines. Legislate's knowledge graph makes contracts machine readable by organising the key contract parameters under an ontology. Unlike a table, a knowledge graph does not require the structure to be predefined in tables and columns which means that concepts and facts can be added and connected. As a result, knowledge graphs are great for storing tangled data. Contract data is tangled and organised by the rules of law which means that knowledge graphs make contract database requests effortless.
What are the benefits of queryable contracts?
As companies grow they need to answer questions about their contracts for compliance and business purposes. For example, a business will need to know its total liability and HR teams will need to know the notice periods of employees. Whilst small businesses and early stage startups might cope with tracking contracts in folders or email inboxes, the time it takes to answer simple questions about contracts will increase significantly with these storage methods as they grow. As a result, answering simple questions like "How many employees are on a 30 day notice period?" or "How many of my sales contracts have break clauses in the next 3 months?" can require manually locating agreements and then sifting through the clauses if these elements had not already been extracted and stored somewhere. Being able to effortlessly track this data allows companies to understand their obligations and better manage their legal risk.
How to create queryable contracts?
Using a contract management platform like Legislate makes querying contracts an effortless process. Legislate's software platform allows you to tailor machine readable contract templates to your requirements from your browser and sign it all in one place. You can then track key event data from your contracts post-signature and query key contract clauses accurately and quickly. Legislate's knowledge graph also allows you to access unique data insights from your contracts such as aggregate metrics about key elements such as salaries, terms and termination events. Legislate's simple pricing allows you to sign up for free and pay for what you use.