Select Page

Seven reasons why you need a clause library

But Word doesn’t help you

Seven reasons why you need a clause library

But Word doesn’t help you

Contracts (and some other documents) typically include standard text like confidentiality clauses, limitations of liability, governing law, and jurisdiction provisions. The text might be standardized for your organization, your industry, or widely accepted as a drafting norm. Some of it is so-called ‘boilerplate’, which gets added to almost all contracts. Some text is needed when circumstances dictate. Clause libraries make it easy to select and re-use sections of text.

Word offers limited help: you can configure Quick Parts and Autocorrect to insert standard text. Here are seven reasons why clause libraries offer so much more:

  1. Clause libraries can be maintained centrally and deployed automatically to teams. You can use Word templates to distribute standardized text to teams, but they are not robust or dependable in practice.
  2. Good clause libraries are contextual. The HR team needs different text to the real estate team. Cross-border deals need extra clauses. A contract for use in Europe needs different clauses to a contract used in the US. Word doesn’t know the context.
  3. Clause libraries need to be updated. When GDPR arrived in Europe, organizations had to update their data protection clauses. Data protection clauses appeared in many types of contract. Version control is a challenge if your documents were created by cutting and pasting standard text into multiple documents. You cannot be confident that updates are adopted by teams without a single source of authoritative text,. Updates should roll out automatically, without relying on users to apply them.
  4. Standard text might not be contiguous. Consider text required for GDPR data protection clauses, for example. Usually, the text includes some defined terms (for example, Data Protection Legislation, Personal Data). Many documents gather definitions in one part of an agreement, in a different place to the text which uses them. If you insert standard GDPR wording, how do you ensure the necessary definitions get added?
  5. Standard clauses often use variable text. In some contracts, the parties are called ‘Buyer’ and ‘Seller’, or ‘Employer’ and ‘Employee’, or the parties might be referenced by short-form names. Standard clauses usually refer to the parties. Rather than create several versions to handle variations (bad idea – see item #3 above), build text that uses placeholders for variable items.
  6. There is more than one version of a standard text. Some documents are short and simple. Other documents justify more complexity and nuance. Within standard clauses, sometimes there are different sources of variation: some confidentiality clauses allow confidential information to be shared with subcontractors, but others do not. Standard clauses (like a confidentiality clause) should adapt to match the requirement. If you burden users with a one-version-fits-all approach, don’t be surprised if they abandon the standard and create their version.
  7. Some options are only available to certain people. There are options available to lawyers that should not be available to sales execs. Some options require approval from managers or compliance teams. Some options should be used as Plan B only after trying to negotiate Plan A. Clause libraries should be dynamic and permission-based.
Smart document automation is the best way to deploy clause libraries. Not all document automation tools can do it. Although document automation creates efficiencies, some organizations will only implement new solutions if they enable outcomes not otherwise possible. Clause libraries are one such outcome. Efficiency and ease of use are a bonus.
Contracts (and some other documents) typically include standard text like confidentiality clauses, limitations of liability, governing law, and jurisdiction provisions. The text might be standardized for your organization, your industry, or widely accepted as a drafting norm. Some of it is so-called ‘boilerplate’, which gets added to almost all contracts. Some text is needed when circumstances dictate. Clause libraries make it easy to select and re-use sections of text.

Word offers limited help: you can configure Quick Parts and Autocorrect to insert standard text. Here are seven reasons why clause libraries offer so much more:

  1. Clause libraries can be maintained centrally and deployed automatically to teams. You can use Word templates to distribute standardized text to teams, but they are not robust or dependable in practice.

  2. Good clause libraries are contextual. The HR team needs different text to the real estate team. Cross-border deals need extra clauses. A contract for use in Europe needs different clauses to a contract used in the US. Word doesn’t know the context.
  3. Clause libraries need to be updated. When GDPR arrived in Europe, organizations had to update their data protection clauses. Data protection clauses appeared in many types of contract. Version control is a challenge if your documents were created by cutting and pasting standard text into multiple documents. You cannot be confident that updates are adopted by teams without a single source of authoritative text,. Updates should roll out automatically, without relying on users to apply them.
  4. Standard text might not be contiguous. Consider text required for GDPR data protection clauses, for example. Usually, the text includes some defined terms (for example, Data Protection Legislation, Personal Data). Many documents gather definitions in one part of an agreement, in a different place to the text which uses them. If you insert standard GDPR wording, how do you ensure the necessary definitions get added?
  5. Standard clauses often use variable text. In some contracts, the parties are called ‘Buyer’ and ‘Seller’, or ‘Employer’ and ‘Employee’, or the parties might be referenced by short-form names. Standard clauses usually refer to the parties. Rather than create several versions to handle variations (bad idea – see item #3 above), build text that uses placeholders for variable items.
  6. There is more than one version of a standard text. Some documents are short and simple. Other documents justify more complexity and nuance. Within standard clauses, sometimes there are different sources of variation: some confidentiality clauses allow confidential information to be shared with subcontractors, but others do not. Standard clauses (like a confidentiality clause) should adapt to match the requirement. If you burden users with a one-version-fits-all approach, don’t be surprised if they abandon the standard and create their version.
  7. Some options are only available to certain people. There are options available to lawyers that should not be available to sales execs. Some options require approval from managers or compliance teams. Some options should be used as Plan B only after trying to negotiate Plan A. Clause libraries should be dynamic and permission-based.
Smart document automation is the best way to deploy clause libraries. Not all document automation tools can do it. Although document automation creates efficiencies, some organizations will only implement new solutions if they enable outcomes not otherwise possible. Clause libraries are one such outcome. Efficiency and ease of use are a bonus.

More Weekly Articles

Start Automating Now