Who Is Best Placed to Make Decisions About a Company’s Contracts?

Who is best placed to make decisions about a company’s contracts? I don’t know; I guess it depends.

How about the general counsel? After all, they should have the broadest perspective, and they should be able to think long-term: How much longer does each deal take because our contracts are wordy and confusing? What’s the risk of our exposing ourselves to risk of contract disputes over confusing contracts? How many deals do we lose because our contracts are too risk-averse? But if the GC has a background in contracts, traditional contract language might be all they know. And if they don’t have a background in contracts, they might be inclined to leave to others all decisions about contracts.

How about the lawyers responsible for contracts? After all, they’re the ones who know the contracts best, and they’re the ones who are lumbered with more work because of templates that are bloated, confusing, and don’t address the company’s needs. But they might be heavily invested in the current system. They might lose face if someone were to come along and demonstrates that the templates they’ve curated leave a lot to be desired.

How about the business department that relies on a given set of templates? After all, they’re the ones who have most at stake. If they’re able to get deals done faster using templates that are shorter, clearer, and more effective, they make more money. But they might regard contracts as lawyer stuff, so they defer to the legal department. And they might be allergic to change.

So it all depends on the individuals involved. Are they ambitious? Do they have imagination? Are they willing to try something new? If so, the company might be able to overcome the black-hole forces of inertia and actually do something about their templates.

Mind you, you can’t assume that you necessarily have to do something. First you assess what’s in your contracts, then you decide. (See this post for more about that.) It might be appropriate for you to do nothing. But given what I’ve seen …

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.