Contracts 2.0

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Contracts are written for lawyers, by lawyers and with lawyers. The modern contracting process is so broken that even big organizations make mistakes.

One of the leading telecommunication company’s erstwhile privacy policy stated that “sensitive personal data and information may include, but is not limited to, genetic data, biometric data, racial or ethnic origin, religious and philosophical beliefs and, as mentioned above, political opinion and sexual orientation.

They responded by saying that –

..The generic content of the definitions of what constitutes personal data as laid down by the IT Act are expansive, which had been inadvertently put on to our website.

This recent fiasco has shown that the way we currently draft contracts makes no sense. This error has crept in because lawyers are trained to make contracts as one-sided and expansive in favour of their clients as possible. Secondly, there is no automated process to verify that the contents of the entire agreement are valid and Thirdly, the use of easy to understand language is frowned upon.

How do lawyers draft contracts?

Traditionally the process of contract drafting is tedious and tiresome. Lawyers usually start drafting using an earlier precedent document and make the changes that are required for that particular situation.

Contracts as we currently use them are old school and outdated. The language is so convoluted that even lawyers themselves have to refer to a legal dictionary to understand the terminology.

It’s not uncommon for contracts to run into 50 pages for a commercial transaction. This causes many problems as the process of drafting and reviewing the contract can take a long time. Don’t get me started on the review process for a long contract! Most negotiations are still done by sending marked-up versions of the contract with so much adversarial red-lining that it can make your head hurt.

The structure of contracts creates confusion while reading, understanding and executing. There is no standardised process for deciding where to add critical information, this causes even lawyers to miss out on key points.

There are a few ways to solve this problem.

Applying design thinking and plain language to legal contracts. Lawyers need to focus on creating contracts that are easier to understand for the business people who will use the contracts more often than the lawyer.

Moreover, lawyers should be encouraged to use illustrations and graphics to create contracts.

Creative Contracts is an excellent example of these types of contracts.

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There is no point in using 50 words to state a fact when the same can be achieved using just 5 words.

There are a couple of things that lawyers can do to simplify the contract drafting process —

  1. Using easy to understand language to make layman understand the terms — Recently, on social media Kayne West had shared his entire agreement while ranting about the complexity of the agreement. This led to a lot of discussion around the language to be used in contract drafting.
  2. Using tools to automate their drafting and proofreading tools to cut down the time spent on drafting the contract.

Lawyers are hesitant to change. It would be unrealistic to expect lawyers to stop using their traditional contract drafting process and embrace a user-centric design process. Going forward I believe lawyers will slowly adopt a user-centric contract design process while being enabled by technology to prevent any errors that may creep in.

Speaking of technology to prevent any contractual errors, we at MikeLegal are working on a tool to help lawyers to change the way lawyers proofread their agreements. Stay tuned for more information on our contract automated proofreading tool!


Credit :  Aditya S

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