Traditional contracts can have several pitfalls that can be avoided through the use of technology. Think about what a contract traditionally has been: a single, lengthy, paper-based document that is time consuming to create and, therefore, does not get updated regularly.
Business today needs to be conducted more nimbly: the fact of the matter is that business transactions today are living entities that require a lot of flexibility. Still, that old paper contract did serve a purpose: it protected the parties involved.
So, what do you need to know to protect yourself?
Be clear about the scope of services
Failing to outline the scope of a service can lead to frustration and lost revenue. What constitutes a service having been completed to satisfaction by both sides? A good solution is to use mixed approaches, but be clear about it.
For instance, a contract with a communications agency could stipulate that 50 percent of consulting time be spent on business outreach, while another 25 percent will be dedicated to creative development, while the final 25 percent will be earmarked for quality control.
The quantitative measurements could then be augmented with a subjective modifier indicating the work should serve to “build the brand, engage customers and maintain accuracy” to the satisfaction of all contract parties.
Be clear about who owns intellectual property
All informational work creates intellectual property, and consultants bring their own toolkits to aid in their work. Often, those toolkits represent outside expertise that can be very helpful, but who owns the content once a consulting agreement concludes?
Say, for instance, a programmer contracted by a company writes code that relies on his own proprietary subroutines. How can the company ensure the work they contract out will always work, even if the programmer has used those same subroutines in projects for other companies?
Careful definition of the scope of intellectual property ownership is a way to avoid these situations (and inclusion of a legal clause to that effect.
Watch for mergers and structural changes in companies
Modern companies merge, reorganize, split and merge again, often leaving consultants in limbo.
While this dynamic is great for business, it presents challenges as contractors’ projects are moved around. Set your contract up in a way that will make it easy to re-visit if changes happen in the future.
ContractRoom’s AI-enhanced Predictive Agreement platform provides deep learning of your previously executed contracts to give you quick access to the 'content', but more importantly, provide you proper ‘context’ for future negotiations and deals. And after execution, automatically converts contract commitments into systematic tasks to enforce delivery and compliance.
Curious about our features and functionality? Contact us today @ ContractRoom.com and request a demo.