“Sticky Contracts”

I just learned a new term—”sticky contracts.” It refers to the tendency of drafters to stick with a given form contract, even if it contains suboptimal provisions. Gordon Smith has a post on the subject at the Conglomerate blog.

Gordon discusses some possible causes of stickiness. As I suggested in a comment to his post, I’d be inclined to attribute much of it to the fact that using, with minimal changes, a contract from a previous deal represents the path of least resistance. It’s not that drafters are precluded from change. Instead, it’s just that often they lack one or more of the time, training, and imagination required to assess the ways in which a given form doesn’t address the client’s needs in a given deal.

It’s useful to bear in mind that whenever you use a form contract, you’ve already unknowingly made a bunch of decisions on behalf of your client. When I prepared materials for a document-assembly version of a simple confidentiality agreement, I ended up with a questionnaire about 35 questions long. If instead of using my questionnaire you were to base your confidentialty agreement on a form used in a previous deal, you’d have to do some reverse engineering to tailor it to your client’s needs. I doubt that in the process you’d get around to asking yourself 35 questions.

By the way, I don’t think I’ll be using the term “sticky contracts.” It is people, rather than the nature of any given contract, who are responsible for the phenomenon the term refers to.

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.