Drafting contracts

(d) Step 4: Prioritising the model contracts

Contract automation starts with the contract building blocks, definitions and contract clauses. Once they are collected in a document, it is time to prioritise the model contracts. The best practice group needs to decide which building blocks, definitions and contract clauses it will address first. In prioritising, several matters may be considered.

Documents the automation of which result in the highest added value should get priority over other documents. This suggests the following prioritisation: high-volume contracts first, followed by high-profit-margin documents. Also, the best practice group may need to warm up a bit or seek its most efficient yet effective way of working. In order to create a good spirit, it may be desirable to aim at a quick success (and therefore the first milestone should be ‘small’).

A nice starter would be the set of miscellaneous provisions. These provisions are often the most neglected part in a contract, which suggests an easy success. A distinction might be made between the true miscellaneous provisions (e.g. assignment, amendments, waivers, entire agreement) and the larger miscellaneous provisions (e.g. term and termination). In parallel, efforts can be made to upgrade one of the class (d) contracts (e.g. the model confidentiality agreement or power of attorney). By prioritising like this, two goals are met: first, a convenient way of working is established and the performance of the individual best practice group members can be assessed smoothly. Also, the contracts in relation to which the greatest value increase would be achieved are addressed first.