As every lawyer knows, writing contracts is not a perfect science. Humans are fallible, which makes anything they do prone to error. Inherently, this creates risk in the drafting process. Indeed, a survey by SpringCM revealed human error was to blame for contract blunders 85% of the time. Incorrect spelling, punctuation, diction, or syntax can convey the wrong meaning or provide misleading information.
If the mistakes cause confusion, a judge could order you or your clients to pay a higher amount than what was originally required, could fine you or your firm, and/or deem the contact unenforceable. Any of these outcomes could spell disaster for your firm or clients. The implications aren’t solely financial though; contracts play a large role in compliance. Firms in highly regulated industries have even more pressure to construct and enforce flawless contracts. Here are five things to pay attention to when producing them:
- Contract changes: While revisions to contracts are often necessary, it’s not uncommon for them to contain errors. Make sure you’ve approved changes before the contract takes effect. This includes the terms in amendments for renewals.
- Risky contracts: Complicated matters could force you to stick your neck out further than you’re comfortable with, which will make any related contracts risky. Take note of negotiations that seem dicey and keep an eye on them.
- Requirements: Don’t let any action items slip through the cracks. If you don’t fulfill your contract obligations, it could become void by renewal time. In the worst-case scenario, this could prevent you or the party you represent from being paid.
- Provisions and acquisitions: Focus on provisions that have been tailored to the contract at hand and be on the lookout for modifications. When it comes to acquisitions, analyze all contracts someone else has created.
- Security and accessibility: If your contracts aren’t secure, you risk losing them. Invest in a trusted cloud platform to keep them safe and make them easily available. By using a cloud repository, your entire firm will have access to them anytime, anywhere.
The steps above will go a long way in helping you avoid contract errors; however, they’re not perfect. Technology exists that will not only help you ensure accuracy and consistency, but will also save you time as you develop contracts. Automate your contract generation process with tools like HotDocs. Schedule a HotDocs demo today to see how this tool keeps contracts error-free and what it can do for your firm.