Contracts are stuck in 2004. Here’s how to fix them
The way most businesses deal with their contracts is broken. The methods are outdated and the potential unfulfilled. Contractbook is made to fix that problem.
We empower the new generation of businesses and make business leaders feel at ease by providing a smooth, data-rich workflow that makes contracts smarter, faster, and easier to deal with. Before I explain why contract management hasn’t kept up with change, allow me to make a brief detour.
In order to fully understand why the way businesses deal with their contracts is broken, we need to look at the history of contracts.
A brief history of contracts
We have been using written signs to communicate and archive information since the beginning of time. It probably started with stories on cave walls, but they weren’t really suitable for contracts. Caves turned out not to be portable, and the drawings lacked accuracy when dealing with more abstract matters.
In came the Sumerians (about 4000 years ago) with the cuneiform script and their clay tablets. The script enabled them to communicate and archive more complex information, and the clay tablets made that information more accessible and easier to transport.
These tablets also turned out to be a great legal invention that provided a better way to codify laws and prove transactions in agreements to create clarity, prevent conflict and determine a legal position. The clay tablets were later replaced by animal skin, papyrus, and paper, while ink and feather replaced engraving tools.
Eventually, Johan Gutenberg came along and invented the first printer, and over the centuries that printer became portable so everyone could have one at their office. The next big leap in the history of the contract came with the digitization of society. Fax machines, personal computers, MS Word, PDFs, and printers have made a huge contribution to the way we manage contracts.
Suddenly, we were able to send contracts over long distances in just a few seconds and store an infinite amount of documents in almost no space and the user-friendliness hit another spike with the digital signature made possible by the e-signature act in 2000 and DocuSign in 2004.
All of these were great inventions, but the fact is that the way most businesses manage contracts hasn’t really changed much since then. We are stuck in 2004.
It’s true that dedicated contract management tools have made it easier and more efficient to deal with contracts, but we haven’t seen any fundamental changes for the majority of companies that are still working with PDF contracts.
That brings us to the next step.
Why we are stuck
As your history lesson shows, the PDF contract has played a key role that made it easier to produce, transport, and store agreements. The PDF was great in protecting the content and preserving a printable design, and the digital signature was a great solution for authenticating the validity of a contract.
However, it has not kept up with change. While most applications used to be siloed and data wasn’t accessible between systems, our current technological landscape is one where we expect our data to be accessible inside our organizations and able to be shared with other systems, the explosion of Cloud-based applications ushered in a new era where data not only became king but the capability to share data across platforms became essential.
There is a new standard for portability and accessibility of information - and contracts are not up to it. The PDF contract is a cave painting in the age of clay tablets. Static PDF contracts keep all the valuable data in our contracts locked and unaccessible to other systems. All the content is wrapped up in useless metadata, stored as image files, and impossible to build any kind of automation around.
The next leap forward
In comes Contractbook: the next leap forward. We go beyond the PDF by creating contracts that still provide the permanence and printable layout, but also allow you to leverage the data inside. Contracts are data. They contain all the most important business intelligence in your company, and they are involved in all central aspects of your operations: employment, sales, procurement - you name it.
With Contractbook, you can leverage this data, you can synchronize it between systems; make self-executing smart contracts and automatic reminders, and even integrate with thousands of other apps. This easy sharing of information allows us to automate routine tasks and make better decisions about our business. The PDF contract was not designed to, and will never be able to, do this. That is why we have to let it go.
For almost 20 years, we haven’t seen any significant development in the history of contracts. We are now seeing a great leap forward in making contracts faster to create, easier to manage, and much more portable. But we are also adding another layer to the contract—another purpose. With Contractbook, the contract is not just a passive risk-mitigating proof of an agreement. The contract becomes actionable in a way that enables businesses to manage and automate their legal obligations as well.
We are adding another dimension to the contract. Herein lies the next true revolution.