An easy way to demystify contract language
Recent contract drafting guru Ken Adams posted on his busy blog a kind of “cheat sheet” for categories of contract language. Adams has written extensively on drafting contracts, and if you’ve read his blog you can tell he’s a busy guy globetrotting and giving drafting advice all over the world.
What’s interesting about the Cheat Sheets is how subtle the definitions can be. Seeing these words and phrases in the context of contracts can be eye opener.
For instance, the word “acknowledges” (a declaration) in contracts actually goes beyond simple agreement (“yeah, sure, yah betcha”) to mean the declaring party cannot challenge the accuracy of a fact. Or how about the phrase “not entitled to” … which sounds fairly firm in denying something, but in fact all it really means is that the party (to whom the phrase refers) is not subject to an obligation.
What about the rest of us?
Of course, one can guess that Ken Adams is writing books and blogs for professionals who draft contracts. This is mostly lawyers (but not exclusively so). But as interesting as Adams’ writings and blogs are (and it’s worth keeping up with him on his blog), a tool like the cheat sheet raises a question.
In today’s business environment, many kinds of employees, not just legal departments, may need to access contracts for review, verification, or other reasons. Not everyone can be trained in contract language – so how does contract management get done among non-lawyers?
Blueridge Software Inc. (makers of Contract Assistant contract management software) has seen that contract management can be (and indeed, often is) delegated to a wide variety of employees with varying degrees of skill and expertise.
Many types of employees are charged with implementing contracts. So how can contact management exist without legal expertise? The answer may surprise many – especially those who haven’t implemented a contract management system.
Contract management tools help define contracts for non-lawyers
Contract management software creates an organized, searchable database of records that were (very probably) not initially organized as a database. That has a tremendous amount of value in itself. Indeed, not knowing about the number or value of in-house contracts is asking for trouble and exposing your business to real financial risk.
But beyond that database purpose, contract management software encourages users and key parties to actively review and monitor the progress of contracts. Built-in tools make this easy to do. For instance, users of Contract Assistant can easily set “alarms” (date-triggered notifications) on key contract events (or elements) to encourage reviews or timely monitoring.
The simple fact is: Easy-to-use tools make good habits easier.
So, how does a contract management tool like Contract Assistant make it easier for non-legally trained employees to manage or monitor contracts? With easy-to-use features and tools.
Users of Contract Assistant can fill out “Key Elements/Clauses” fields for each contract record. Filling out information in these fields ensures that main parts of a contract get “translated” into easy-to-understand (and easily searchable) elements. That’s important when contracts need to be monitored or reviewed by non-legal staff.
Having to pull up a contract in all its legalese glory (providing you can, of course, find the right document or version without an organized database) can create more questions than answers. For instance, a “make good” clause in a contract that stipulates what happens when a vendor misses a shipment may be written in such a way to make it nearly impenetrable for a non-legal department employee to interpret.
However … if this clause is recorded in the “Key Elements/Clauses” section in plain English, the problem is solved.
Who does that?
Of course, the employees in charge of contract management will be the ones in charge of doing that interpretation. That means they may indeed rely on legal department of corporate counsel expertise to correctly rephrase language found in a contract.
This isn’t necessarily a bad thing. Without a contract management solution, this may never happen – leaving contract language in an emergency situation left to the interpretation of others (should counsel or legal not be able to provide a timely answer). That can easily lead to a disaster as well.
The “Key Elements/Clauses” fields’ function is of course to record the major events that matter to the organization. It may not be intentional, but in reality this may be a way for employees to strip down contracts to the basic elements that affect every day operations (and budgets and resources).
Intended or not, that’s useful to any business.
[Photo Credit: Lili Vieira de Carvalho via Compfight cc]
[About the author: Todd Hyten is a former business journalist who now writes about B2B topics and consults on content marketing. You can find him on Twitter and Google+.]