When Is the Final Signed Version of a Contract Not the Final Signed Version?
Imagine the following scenario: You’ve been negotiating hard on a big deal for weeks. Late nights, heated disputes, neither side giving an inch. Finally, miraculously, a compromise is reached, all parties are equally dissatisfied and the contract is inked.
Time passes, and then someone notices that various items in the signed contract appear to be incorrect – key figures are wrong and don’t seem to add up. Your team has been working with the wrong information. “That’s not what we signed!” you cry. And sure enough, inexplicably, somewhere along the line there seem to have been changes – without your knowledge.
This is a very real possibility. In fact, due to a bug in some Xerox photocopiers, it’s even worse than you might think. The copiers in question were inadvertently changing the content on copies or scans of documents.
But it needn’t be like this. We shouldn’t have to read through our contracts to understand the commercial obligations and terms. Separating the commercial transactional data from the contract wording is a powerful and important concept. This separation makes it easier to eliminate errors and mitigate the risks that inevitably creep in when you:
- re-key “profile” metadata in a document management or contract management system
- copy and paste content from old contracts to create new ones
- consciously use optical character recognition software
- unconsciously fall victim to obscure photocopying and scanning issues (like the Xerox scenario above)
When tools like Exari are used to create contracts, the transactional data is automatically available to track commitments. The dependence on the written words in the contract is then minimized. Clever features, such as the ability to round-trip documents, allow differences between negotiated contract versions to be highlighted and risk sensitive areas to be identified. The transactional (or contract data) layer also allows the commercials to be neatly separated from the legals. This is particularly useful for non-legal audiences. It’s worth thinking about these advantages the next time you receive a ‘Xerox’ of a contract.
This blog post was written by Justin Lipton, CIO, Exari.