Right Size Your Contract.
It’s too long!
I was recently asked to look at a company’s standard contract. Typical TCV for the company’s contracts was £150k and the contract template was 45 pages long. Clearly too long for TCVs of £150k.
Why does length matter? Because the more words there are, the more words there are to argue about, and the minimisation of friction should be one of the main objectives of any sales-contracting process.
When you are a seller, your contracts have two main aims. They are:
securing your position (price, payment terms, margin protection, downside minimisation, etc), and
making it easy for the buyer to sign.
Clearly those two drivers can be in opposition to each other, but there are also a number of ways in which they can be in sync (think Venn diagram).
Most sellers concentrate on the first point and ignore the latter. As a result they increase friction, time to money, and the chances of the buyer walking away.