There’s a tension—we want contracts signed faster and we want consensus among parties to be more robust, but no one has the time and patience to decrypt increasingly long and complex contracts. Long text is a terrible interface to communicate complex ideas.
Lucky for us, there’s an emerging discipline called contract design. Where smart people, like Stefania Passera in Finland and Rob de Rooy in Cape Town, have been building contracts using drawings, and even cartoons.
Stefania explains the mission of contract designers really well:
In my work, I specialize in transforming contracts into user-friendly tools for business. Better understanding means more effective processes internally and better relationships with customers and suppliers.
In Cape Town, Rob de Rooy, draws contracts as comics. He wins awards. He was even featured in Forbes!
He describes his work as:
We produce illustrated contracts for people who are illiterate, people who are not literate in the language of the contract, employers with multi-cultural workplaces or companies that wish to transact with people who suffer from reading or intellectual disabilities. We want to enable people to be able to independently understand the contracts they are expected to sign.
It’s not just these pioneers in the space. Big old, company companies are adopting visual contract design in their operating contracts.
This October in Toronto, Gary Crag from Nexen Energy (a huge oil company based in Calgary, Alberta), won the Social Benefit award from the International Association of Commercial Contract Management for simplified and visual contract design.
Image from Medium.com
What’s the most interesting part about the Nexen project is the reason why they wanted to visually design their contracts.
The new documents focus completely on user understanding and include a guide to reporting and project management to reduce administrative burden. These practical guides to action should result in fewer process errors as well as "doing the right thing."
…we developed a document set that could be easily understood and digested by small to medium sized firms that might be less sophisticated than the big multi-nationals we normally dealt with.
There are real tangible benefits to designing contracts in a way that people, particularly non-lawyer humans, can understand.
With Nexen doing remote energy projects, one big problem they were likely facing was non-compliant bids to their RFPs and vendors being offside their contracts (all the time). They were likely even having non-competitive bid processes because many SME service providers were unable to submit bids since they were intimidated by the 75-page, full text documents outlining the bid process and contract.
Visual, simplified contracts are really about inclusiveness, Rob de Rooy says. Inclusiveness towards second-language speakers, different socio-economic bands, people with learning or reading disabilities, or simply just people that didn’t go to law school.