Are 'comic contracts' a joke?

Published: 04 May 2018 Average Rating: 4.5 / 5 Print

Author: Tim Cummins

Not only are comic contracts not a joke, they are indicative of the way forward. And not only is it socially responsible to make contracts understandable, it is also good business.

It doesn't matter what statistics you choose, most people cannot understand contracts and many don't try – they just sign. And of course this attitude relegates 'the contract' to a position of limited importance. It is an annoyance when it causes delay, a source of celebration when signed and a potential weapon (or defence) when things go wrong. But a tool for communication? Not really. A brand promise? Rarely. A source of corporate pride? That really is a joke.

It can be different

A recent article by J. Kim Wright illustrates that things don't have to be this way. For years, IACCM (the International Association for Contract & Commercial Management) has promoted contract simplification and has offered its Contract Design Award to those who design for users, rather than remain stuck in 18th century legal tradition. There are many good reasons for thinking differently – and of course it doesn't have to involve turning the contract into pictures. Indeed, the section of the article that most struck me was this:

”As they took the long and cumbersome contract apart, they became more and more aware of terms that did not fit their values or culture. They had to reverse-engineer the complex lawyer-focused agreement to get back to the true intentions and needs they wanted to address in the contract. What were they really wanting to accomplish? How would their contract reflect their workplace culture and values?”

Do your contracts reflect your business values?

Throughout my career, I have found most top executives to be disengaged from the contracting process. They see contracts as necessary, but not of real interest or relevance. Yet as the above section illustrates, a contract tells you about a business, its true beliefs and ethics. It is their commitment – or lack of commitment – to the market. As former IBM Chairman and CEO Lou Gerstner once said:”Contracts are about brand image”.

In some of the best and most successful businesses, I have been fortunate in seeing a very different level of executive engagement, where the CEO actually wants to test and align 'what we say versus what we actually commit'. For many, doing an honest evaluation is a scary, controversial and eye-opening experience because they come to realise the scale of mismatch between their public and marketing statements, compared with the actual commitments contained in the contract. But having that alignment is the real route to sustainable growth, to ensuring true 'ease of doing business'.

Is it really the case that contracts should be about minimizing commitments or – far worse – trying to take advantage of people, of suppliers, of customers? Is that the standard of ethical behavior to which you and your business  aspire? If not, then it's time to undertake an evaluation, to bring your contracts into line with your value system – and perhaps to make them something that is designed for users, a source of pride, a communication that can be understood. Now that really would mean that your contracts were not a joke.


Related Discussions

Please sign in or register to post on this forum

Novo Nordisk
2019-03-29 09:26:07

Graphics changes in negotiated templates

Have you tried using simplification techniques (text and visuals) in templates that may be changed during negotiation? I successfully launched a simplified confidenti...
Replies: 3

2018-06-26 05:44:04

Contract Simplification

Very interesting topic and very well presented by Phil. Graphical presentation with minimal wording for the better understanding and easier acceptance by sellers.
Replies: 1

Marshall Denning
2019-06-12 10:55:59

8 payment schemes

Jacko mentions there are 8 different payment schemes - do we know which?
Replies: 1

East West Bank
2019-04-17 22:53:11

Outsourcing Agreement Template

Hello, Does anyone have an outsourcing agreement template? If so, please let me know. Thank you. Kind regards, Isis Bastet, CCMP
Replies: 1

AJA Global Consultancy Services, LLC
2019-04-17 20:51:10

Document and Record Management: An Interesting Challenge to Contract Managers.

Greetings fellow members. I posted the below essay about Document and Record Management in the NCMA Forum, to which I am also a member as CPCM and CCCM. My initial th...
Older entries »