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Make Contracts Visual

Updated: Aug 25, 2023

Contracts form the backbone of business relationships, shaping collaborations, commitments, and expectations. However, several challenges often lead to value loss in these crucial agreements. Organizations face three primary pitfalls: lack of stakeholder involvement, complexity that hinders understanding, and subpar handovers between deal and implementation teams. Thankfully, a solution is emerging – the power of visualizing contracts.

Stakeholder engagement stands as a cornerstone of successful contract management. When stakeholders are not actively involved and informed throughout the contract lifecycle, rifts form, leading to disconnect and dissatisfaction. This is where visual communication steps in. Incorporating video, animation, and graphics into contracts ensures that all parties comprehend the terms, fostering collaboration and reducing the risk of stakeholder fallout. The complexity of contract language often presents another hurdle.

Traditional contractual text can be dense and confusing, causing misunderstandings that ultimately lead to compliance issues. Visual contracts address this problem head-on. Studies have shown that people remember 80% of what they see, compared to just 20% of what they read. Additionally, research by PhD candidate Passera (2017) demonstrated that individuals grasp the content of visual contracts 35% faster and with 29% greater accuracy than traditional textual contracts. By simplifying complex terms into visual representations, organizations can drastically enhance understanding and compliance.

One often underestimated challenge is the transition from the deal team, responsible for crafting the contract, to the implementation team tasked with executing its terms. More than 60% of project managers report problems with this handover process, citing issues such as lack of engagement, poor communication, and inadequate software tools. Visual contracts offer a seamless solution. By providing a clear visual roadmap, these contracts facilitate smoother transitions between teams, ensuring that the original intent of the contract remains intact and actionable.

Incorporating visual elements into contracts goes beyond aesthetics – it's about optimizing communication and comprehension. By leveraging the human brain's natural affinity for visual information, organizations can minimize stakeholder fallout, enhance understanding, and streamline the transition from agreement to execution. As the business landscape continues to evolve, embracing visual contracts could prove to be a game-changer, ushering in a new era of efficient, effective, and value-driven contract management.


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