Rather than blinding leaping onto the digital bandwagon, STOP! Let’s consider if you are ready for or even need digital contracts.
I’ve been speaking to Mo Shana’a from Morta regarding questions he asks a company to see if they are motivated to change their current ways of working. Imposed changes frequently create defensiveness and internal barriers. The motivation to change can arise from establishing the dysfunctionality of current contracting before proposing a solution.
Dysfunctional contracting
A lot of contracting is not an “orderly negotiation of terms. Rather the picture is one of the parties, jockeying for advantage, inching towards finalisation of the transaction…” [Percy Trentham Ltd v Archital Luxfer Ltd [1993] 1 Lloyd’s Rep 25].
Although you may be the exception to the rule!
Further evidence supports this view:
- One of the top 3 causes of global construction disputes is errors in the contract documents [Source Arcadis Global Disputes Report 2019]
- 30% of UK construction projects start without a contract being in place [Source NBS Contracts and Law Survey]
- 40% of companies feel forced into accepting onerous payment terms [Source IACCM Report]
Does this reflect your experience of contracting? If it does then perhaps it is time to consider alternatives…
What would encourage you to change?
Answer yes or no to each of these questions:
- Is your contracting process visible, measurable and repeatable?
- Are you over-burdened by administrative tasks relating to just getting started on a project e.g. proposals, quotes, contracts and orders?
- Do you waste a lot of time on ’email tennis’ to share, comment, review or sign agreements?
- Is your contract strategy mostly based on hope?
- Is your contract process easy for your clients?
- Do you use your contract terms to make up for gaps in your contract process?
- Are you making mistakes that in your contracts that are harming your business (costing money, taking time to resolve, leading to uncertainty or resulting in disputes)?
- Are you spending too many resources comparing documents and reconciling information?
- Are you starting projects or tasks without a contract?
- Does your contracting process create a clear audit trail setting out the scope, aligning your aims, agreeing who manages risks and their consequences, and which builds trust?
What should you do?
Contracts are tools to help you do business. Whether they are hard, soft or digital, those contracts must be fit for that purpose.
If you answered yes to more than 3 of the questions above, you need to change your contracting process.
