Less Is More

If you are producing a contract, and you’re worried that the contract won’t address all the issues it needs to address, there are two ways you can approach things.

Route 1: Be clear about your objective, and the parameters that go with that objective, and produce a contract that meets those requirements.

Route 2: Throw as much paper as you can at the contract, on the basis that, if there’s enough paper, nothing will get missed.

Last week I was asked to look at a (buyer-produced) contract which was pure route 2.

It was a simple transaction: a software licence. The contract consisted of:

·       54 pages excluding the annexes,

·       6 schedules,

·       14 (14!) annexes attached as Excels or zip files. 

One of the annexes was a set of SLAs which came in at 41 pages (in addition to the 54 pages of the main contract).

All in all, it was gibberish. From the buyer’s point of view, there was no coherent way of making sure the contract met its objectives (other than taking the whole day off and working through all the documents).

From the seller’s point of view, once they had managed to work through all the documents, it was pretty good for them. Because there was no design or real intent behind the contract, it didn’t constrain them and they could do pretty much whatever they wanted.

Moral: route 2 will always be a disaster. You can’t avoid the need to think and decide on the objectives that your contract needs to meet. 

The more paper you throw at a contract, the more trees and the less wood you create.

Less is more.

1 April 2025