The 5 Most Disputed Contract Clauses

The IACCM is currently collecting data for its latest ‘most negotiated’ clause study, which will reveal the terms that are most disputed during contract negotiations. While negotiation will likely continue to require a serious time commitment on behalf of the lawyers, the process can be improved. There are several tools and technologies available to aid in the negotiation process, but the best place to start is with a well drafted contract.

Automating commonly used business contracts such as sales contracts, licensing agreements, and engagement letters allows you to avoid repetitive redrafting, save time and reuse those well-worded clauses that you have worked so hard to refine. If you don’t have access to a document assembly system, you can at least maintain a library of those clauses and some basic templates. It’s best to work from a template, rather than cutting and pasting Word documents, which can lead to costly mistakes.

However you draft your contracts, refining your clauses as you wend your way through rounds of negotiations will save you time on future contracts and help you start your next negotiation from a position that works well for you.

To date, and the survey has only been live for a week, the IACCM has received 800 responses regarding the most disputed contract clauses. So far, the top five are:

  • Delivery / acceptance
  • Price / charge
  • Change management
  • Invoice / late payment
  • Performance guarantees / undertakings

Law department management advisor Rees Morrison said, “If your legal department wanted to set a policy for when contract changes must be reviewed by a lawyer, this set of five would be a good place to start.”

If you’d like to add your opinions, you can take the survey here, which will entitle you to receive a copy of the results.

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