Top 7 most contentious contract terms

Each year, the International Association of Contract and Commercial Management (IACCM) publishes a highly popular annual list of the most commonly negotiated contract terms.  The 2011 list is being compiled at the moment and legal and contracting professionals are invited to provide their input by following this link:  https://www.surveymonkey.com/s/2011TopTenTerms

A list of leading contentious contract terms that have a higher propensity to lead to conflict and litigation is an interesting alternative deliverable to come out of the submissions received so far from this year’s Commonly Negotiated Terms survey.  In the latest Fulbright & Jaworski Litigation Trends survey, it is suggested that over 50% of corporate litigation arises from contract disputes.

If General Counsels are to try to reduce the cost of litigation, then they may be advised to take note of the following list of IACCM contentious terms:

  1. Delivery/Acceptance (cited by 43% )
  2. Price/charges (38%)
  3. Change management (33%)
  4. Invoice/late payment (29%)
  5. Performance guarantees/undertakings (28%)
  6. Service levels (27%)
  7. Scope/goals (23%)

It is interesting to note here that the most popular IACCM contract clauses (confidentiality, IP rights and IT security) do not appear to be invoked in corporate litigations.

It can be argued that with more effective contract management, most or all of the contentious clauses listed here, could be managed and addressed before they become an issue.  Dolphin Contract Manager’s contract obligations management functionality, where key commitments and obligations can be identified and distributed to key business stakeholders, play a key role in ensuring 100% compliance to contracted terms and conditions.

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