Tip 6: When making your specific contract, start with the correct template

Introduction

Previously in the series “How to improve contract templates”, we emphasized knowing the content of your contract templates. See the full article here: https://amstlegal.com/tip-5-review-the-contents-of-your-templates/. Now we’re zooming in on perhaps the most common issue with contract templates: How the templates are used daily. Because even with all the technology available to automate contract creation, most contracts are still created in word processing software such as MS Word. The templates are often saved in unstructured ways too. Additionally, the people that use the template contracts on a daily basis for a specific customer contract do not always use the correct template, i.e. the latest version, when making a new contract. While simultaneously doing that without using contract automation, unexpected risks can show up later on. Keep reading to learn what risks you could be facing, and how you can manage them.

When making a specific contract, start with the correct template

Why is it so important to start with the correct template?

Naturally, it sounds very convenient to use a contract of another client or the contract template that you have been using for years when making a new contract. However, this is the biggest risk associated with contract creation for companies that do not use contract automation. More time and money will need to be spent on the (re)negotiation of the contract and/or potential mistakes or claims in the future because your contract did not fit with the client or the specific situation. Using the correct template can be a step on the way to minimize encounters with these risks.

How do you minimize this risk?

So how do you avoid the risks connected to not using the correct template? There are many options to minimize those risks. However, we have found from experience that the two best ways to minimize these risks are:

1. Fully/partly automate your contract creation and be strict that this is the only way that contracts can be generated; and
2. Create a central place (usually an internal website) to store the contract templates, and give your employees regular training.

Unfortunately, the first tip can take some time to set up and requires recources for it to fully work. The pros outweigh that though, so don’t fear the power of technology when making contracts. For the second tip to fully work, we advise to provide training to the employees regularly. For example at the start of the employment followed by regular consistent training after that. This is our standpoint because you want your employees to know where the templates are located and how to use them.

Another tip that could be conjoined with the other two is to make sure that the importance of this is discussed regularly in your team or during company meetings.

Conclusion

To sum up this article, it can make a major difference on the aftermath of your contracts whether the correct template is used or not. Therefore we do advice to invest in good templates and good training for the employees. Doing this will make your contracting process much easier. If you feel like this is something that you would benefit from, contact us at AMST Legal for further personalized advice.

About AMST Legal

At AMST Legal, we provide advice how to improve your (legal) processes and contract templates. Helping you to make sense of all your standard contracts and templates and where to start drafting or using these standards is part of that. Contact us at lowa@amstlegal.com or book a meeting here for help with your legal (compliance) framework.