Why do we need visualization in contracts?

Have you ever heard the saying “one picture is worth a thousand words”? In nowadays fast-paced, complex business environments nobody wants or has the luxury to read pages and pages of dense, convoluted texts. What we need is information that is easy to access, easy to search, easy to skim, easy to understand, and easy to put in practice.

Business contracts should be no exception. And yet they are a prime example of documents that nobody wants to read. When contracts fail, often they don’t do so for a lack of legal, technical or business expertise, but for a lack of communication. Most litigations and business relationships gone awry can be linked to misunderstandings, misinterpretations, and a failure to accurately describe the contract scope.

Proponents of proactive and preventive law suggest that this is a symptom of dysfunctional contracts, drafted by lawyers for lawyers. Instead:

“A proactive contract is crafted for the parties, especially for the people in charge of its implementation in the field, not for a judge who is supposed to decide about the parties’ failures.
… the proactive contracting process and documents seek to align and express the interests of both sides of the contract in order to create value for both.”

Gerlinde Berger-Walliser, Robert C. Bird & Helena Haapio (2011)

Enter contract visualization – the use of diagrams, images, and visually structured layouts to make contracts more searchable, readable, and understandable. As I see it, contract visualization is a practical manifestation of proactive and preventive law, because it helps to communicate contracts in a clear and actionable way.

Availability process diagram in a B2B equipment purchase agreement
Prototype tenancy agreement for university students

The first benefit of well-designed contracts is that people can read them faster and make fewer comprehension mistakes. This is true for both native speakers and non-native speakers (think about the consequences for global business!), and for contract professionals (in both private and public organizations) and laypeople alike.

Some data from my PhD: visualized contracts are easier and faster to understand

A second benefit is to make contracts more appealing: by changing their look and feel, we can hope to win back the interest of managers and consumers too busy or too bored to read the same, old, long, frustrating type of contract. A carefully drafted and visualized contract communicates to customers, suppliers, and partners that your company cares about communicating meaningfully with them. It’s a matter of basic good communication, branding, and transparency.

Some more data from my PhD: users perceive visual contracts as more pleasant and more functional than their text-only counterparts.

But visualization is not about beautifying your contracts: it’s all about helping people understand and making better decisions. This is why, according to Stanford University professor Jay Mitchell, you should start sketching and visualizing from the very beginning when you are planning a transaction and the contract that captures it. Already in the pre-award phase and during negotiations, visualizations (like the service scope map below) can help parties in aligning their goals, frame and share the same view on important issues, and proactively discuss and solve troubles before they escalate. This is proactive and preventive law in action: it is cheaper and easier to prevent legal troubles early, rather than “cure” them.

Service scope map used in paper mill operations and maintenance outsourcing agreements (anonymized version)

Leave a Reply