Contractual incompetence is far more expensive than contractual risk.
Contractual risks are things you’ve agreed to that could hurt you in the future, like uncapped liability.
Contractual incompetence is much more drab. It gets almost no attention, even though it costs most companies far more.
Some examples:
- You don’t have a signed copy of the contract so it might not even be enforceable.
- You miss lots of key dates and pay penalties as a result.
- Nobody knows where the amendment to that really important contract is saved.
- Entire teams have no access to the contracts they’re meant to be fulfilling.
- The spreadsheet your colleague cobbled together is full of errors.
- The expiry date is before the commencement date.
- “The initial term is two (3) years”.
- You have no visibility on your contractual risks!
The solution to contractual incompetence is to create a contract database.
