Contracts vary in their structure, complexity and goals, but they can safely be defined as legally binding agreements between two or more parties made voluntarily. They are frequently multi-layered and subject to endless back and forth negotiations before they are finally executed, but they share a similar language that helps streamline their creation. It is important to always read and understand exactly what is expected of you before signing a contract, but with a handy glossary of basic contracting terms, you can get know at a glance the terms you’ll see more than once during the contracting process.
We’ve got smart phones and smart houses. The way we live and work has become immeasurably more interesting and efficient because of our technology. The same is true for contract negotiations and the future is looking even smarter. With emerging technology like Blockchain, contract lifecycle management (CLM) can be further revolutionized through self-execution, transparency, and mass collaboration.
Nothing can strike fear into the hearts of attorneys or businesses like “breach of contract.” Contract negotiations are tedious, exhausting and overwhelming. When a hard fought executed contract is found to be non-compliant, the results can be devastating to all parties involved. While a simple verbal contract, which meets minimal criteria can be legally binding. For business transactions memorialized in writing, contract compliance is significantly more rigid and complex.
It is not uncommon for businesses to focus all their efforts on an initial contract, and then feel that contracting work is done, only to realize there are many activities that carry forward, such as a renewal or amendment. Therefore contract management can be as important, if not more important, than that initial contract, such as a Master Agreement. Effective management of your negotiations, contracts and the contracting process can be the difference between a fruitful business relationship and a damaged one. It can ensure the seamless renewal of a contract, or precipitate a contract termination or worse still, costly and time-consuming litigation. Yes, ‘breach of contract’ is a real thing and subsequent legal claim and litigation can be a huge distraction or even tank a company.
In a perfect world, business and legal activity would flow smoothly, employee productivity would be peak levels, and work/life balance would be mandatory. But, since the world is far from perfect, corporations and their employees must do their best with imperfect environment. However, much of the business world is seeking a transformation of internal operations to achieve greater efficiencies and outcomes. With respect to the operation of business transaction contracting, there are several success stories of corporations embracing technology to help foster and achieve success – the key though is to lay the proper foundation which in some cases requires re-engineering process flows.
While every contract has unique characteristics specific to the commercial transaction, there are certain features that lend themselves to standardization. Indeed, most contracts have been assembled by business and legal teams with a ton of “cutting and pasting” from various contract templates; however, with a lack of systemic control. This can create what is known as content customization, worse yet and a ‘legal exception’ given the amount of complexity and risk a simple word change can generate. That is, content changes in the document assembly process can trigger a significant change in the intent or context and not be caught by the ‘naked eye’ in such process. So, if your company is a behemoth, or the proverbial “800 pound gorilla”, then maybe you can get away with just locking down your assembly process so no internal changes can be made. And even not allow for editing or negotiation with your counterparty.
With emerging technologies like blockchain ledgers and decentralized markets taking hold, business managers can fully expect the business contracting environment to change dramatically in coming years.
3 industries that blockchain technology and smart contracts are likely to disrupt