WorldCC Pitfalls in Contracting
In 2015, World Commerce & Contracting (WorldCC) published their 10 pitfalls in contracting that were leading to companies losing on average over 9% of the anticipated value in their contracts. More recent research suggests that it is down to a mere 8%, sadly not as much progress as we might hope over ten years. How might we turn this around?
1. Lack of Clear Scope and Goals
Are you setting your contracts up for failure from the start?
The first WorldCC pitfall is a lack of clear scope and goals. When contracts fail (see the WorldCC’s repeated surveys on what goes wrong in practice), it’s usually because the focus in negotiations have been on liability, indemnities, termination - what happens when something goes wrong - rather than what needs to go right: i.e., what the parties are going to do. Negotiations have been dominated by "legals" rather than aligning objectives.
We’re going to come back to the role of contract templates but the starting point is to recognise that the most important parts of the deal are the parts that vary the most between deals and are least capable of standardisation (especially for customers): scope and goals.
How do we fix it?
We recommend objective-led contracting. Start by getting clarity on what your objectives are by talking them through with the business. Identify early in the negotiations what the other party is trying to achieve, then focus the negotiations on the points that are most relevant to those respective objectives.
The most valuable parts of the negotiations are helping the parties think through the implications of their objectives, what might go wrong, and how to avoid or at least mitigate the real risks (not just pass the consequences to the other side).
From the customer’s perspective, this can be as prosaic as how can to ensure that the scope is clear, and will meet the business’s needs? From the supplier’s perspective, how can you ensure that you know what is expected by the customer and can deliver it cost-effectively?
To ensure the negotiations are on the points that matter, put them up-front in your contracts. Structure your contracts so that they lead with the commercials.
Contracts are tools to support objectives and delivery. By prioritising alignment, you set your deals up for success from the very beginning.
2. Contracts Legal Team Involved Late
Is your legal team always the last to know?
The second WorldCC pitfall is the late involvement of legal teams in deals. While being brought in at the eleventh hour is a problem, having legal involvement in every deal from the start isn’t the solution either—it’s simply not feasible.
This creates a classic resource challenge: legal teams need to be involved early enough to ensure the deal is on the right path but can’t afford to drown in every single negotiation.
How can we square the circle?
The key is to define clear rules with sales and procurement on when legal needs to be involved. Not every deal is bespoke, and not every situation requires a lawyer from the outset. Providing teams with templates, playbooks, and negotiation guidelines and supporting them with alternative legal service providers like Radiant Law enables sales and procurement teams to manage routine deals independently while reserving internal legal resources for the most strategic and complex matters.
In a world where resources are limited, internal legal teams can’t cover everything. But with the right tools, processes, and suppliers, they can focus on the deals that truly matter.
3. Failure to Engage Stakeholders
Who’s missing from the table during contract negotiations?
The third WorldCC pitfall is failing to engage stakeholders. Too often, the people who will actually live the contract—whether by benefiting from it or delivering its promises—are absent from negotiations. This oversight leads to misaligned priorities, impractical terms, and unnecessary conflict later on.
There are two key groups often missing:
- Direct stakeholders, such as business leaders (beyond procurement) and operational teams (beyond sales). These are the people who will be benefiting from the deal or responsible for delivering on the promises that have been made.
- Subject matter experts (SMEs), who can have their points overlooked, but can also require extensive schedules while not being involved in the negotiations themselves.
The point of contracting is to build relationships, and that means having the right people in the room. We’ve covered in the previous section the need to start with the objectives of those with the most to gain or lose from the contract. Involving the direct stakeholders who will live the contract is important if we are going to create effective relationships.
How can we involve SMEs effectively?
There is a general truth in contracting: people quite reasonably worry that they will be blamed later if something goes wrong. If you are responsible for risk in one part of the organisation then you will not only tend to focus on that risk above all else, but also worry about being blamed if something goes wrong in that area. So naturally, you are going to throw as many things into the contract as possible to address potential risks.
We are regularly seeing times where negotiations of SME-required provisions often take as much, if not more, time than the rest of the contract combined. This is getting in the way of broader objectives and creating real risk for the organisation.
We’ve already covered the value in providing the contracting team with templates and playbooks to support negotiations. But this will be counterproductive if the templates go beyond what is required by regulations and are not relevant to the deal. SMEs need to also provide playbooks to empower the team to ensure that only relevant parts are being argued for.
And if the negotiations are still being dominated by these issues, then perhaps it’s time for the SMEs to sit at the table and negotiate the points that they are insisting on. Risk and control need to go together.
4. Protracted Negotiations
Are your contracts stuck in endless negotiations?
The fourth WorldCC pitfall is protracted negotiations. Long, drawn-out discussions frustrate everyone involved and can stall momentum, ultimately putting the deal at risk. Yet, contracting pain is often self-inflicted, caused by overly complex agreements and a lack of focus on the issues that really matter.
But negotiations aren’t inherently bad. When used effectively, they’re an opportunity to reconcile differing interests and create value for both parties. A thoughtful negotiation process strengthens the relationship by addressing potential challenges and aligning on how to make the deal work in practice.
How do we identify what’s important?
We already have most of the answers:
- Identify the objectives of the key stakeholders, and focus the negotiations on those.
- Make sure that your templates are relevant: make them modular so that they only include the parts that matter for the deal in hand.
- Make your templates reasonable… we will come to that next.
- Use escalations effectively: unblock negotiations, by having decision-makers available to take a view (and pre-can this where possible in your playbooks).
Negotiations don’t have to be endless, and they can be constructive, but that means focusing on what matters.
5. Negotiations Focus on the Wrong Terms and Risks
Is risk allocation making your contracting riskier?
The fifth WorldCC pitfall is focusing negotiations on the wrong terms and risks. We’ve seen the results in the previous pitfall with protracted negotiations.
If we want to be spending valuable negotiation time on the objectives of the parties, how are we going to create the space?
We’ve covered problems with SME-required terms, but this is also being caused by “legal” terms. Survey after survey from WorldCC shows that too much time is spent debating indemnities, liability caps, and termination clauses - topics that address what happens if something goes wrong, while the real sources of contract failure—scope, dependencies, and pricing—don’t get enough attention.
It’s the same issue that we had with SME terms - fear of being blamed later. And this is where reasonableness comes in more broadly.
Reducing legal debates without giving the farm away
We are great believers in standardising terms where possible, but standardised terms are unhelpful if they lock in unreasonable positions.
What do we mean by unreasonable? Terms that cause unnecessary debate because they are so one-sided.
The test we recommend is asking yourself whether you would be comfortable signing the agreement if you were on the receiving end? This isn’t the same as not protecting your interests. We are recommending terms that reflect both your objectives and the likely objectives of the other side - in other words where you would end up anyway after extensive negotiations. If we can save time on the issues that will end up a draw anyway, negotiations can focus on the parts that really matter, while closing deals faster that are more likely to succeed.
Stop worrying about asteroids and start focusing on crossing the road safely. When you prioritise what’s truly important, you create contracts that work.
6. Contracts Lack Flexibility; Insufficient Focus on Governance
Are your contracts too rigid to succeed?
The sixth WorldCC pitfall is contracts that lack flexibility and have insufficient focus on governance. While some deals are purely transactional, the most valuable contracts are about building long-term relationships. Unfortunately, rigid terms and overly prescriptive structures can stifle those relationships, making it harder to adapt when things change—as they inevitably will.
Building flexibility into contracts requires trust. Trust that the business teams managing the deal can evolve the relationship as needed, and trust that good governance practices will guide them in the right direction. Governance isn’t about micromanagement; it’s about creating a simple, actionable framework that supports collaboration and encourages the right behavior.
How can our contracts evolve?
Start by treating contracts as a minimum viable trust-building to get the relationship off on the right footing. Design agreements to be easy to update and evolve, and include mechanisms for relationship-building governance. Make governance simple and intuitive so teams are nudged toward the right decisions without unnecessary complexity.
Relationships are messy, and contracts can’t eliminate all uncertainty. Your best gift to the future is a simple framework that is easy to change, and nudges relationship-building governance.
7. Contracts Difficult to Use or Understand
Are your contracts making people feel stupid?
The seventh WorldCC pitfall is contracts that are difficult to use or understand.
The most critical sections of any contract—scope, pricing, and terms that vary between deals—are often the hardest to standardise and the most buried. These are the sections that directly impact operations, finance, and overall business outcomes. Yet they often end up lost in lengthy documents where it’s hard to tell what’s important or what’s unique to a particular deal.
How do we make contracts usable?
Start by making contracts short, clear, and relevant. Sit down with the teams who use the agreements and find out what they actually need to see. Move the important, variable parts—like scope and pricing—to the front of the document, where they can’t be overlooked. Use plain, straightforward language to eliminate unnecessary complexity and make contracts accessible to everyone.
Contracts are formal documents, but that doesn’t mean they have to be incomprehensible. Write for the business people who will use them, not for judges in a courtroom. When contracts are clear and actionable, they’re more likely to be followed, ensuring better results for everyone involved.
8. Poor Handover from Deal Team to Implementation Team
Is your contract getting lost in translation?
The eighth WorldCC pitfall is poor handover from the deal team to the implementation team. Even the best-negotiated contracts can fail if they aren’t properly implemented. A disconnect between the people who close the deal and those responsible for delivering it means that the contract is less likely to be delivered (and those terms you brilliantly negotiated won’t be used in practice).
What actually happens is what matters. Although we like to think contracts will save us, in practice the cost and distraction of litigation means that courts are rarely used to enforce terms. Having said that, parties tend to do what they agreed to, and it’s poor communication and handover that cause many of the problems.
How to get everyone aligned
The starting point is making contracts actionable and easy to operationalise. Anyone picking it up should be able to quickly see what needs to be done.
But we also need to bring the people who will manage the relationship into the negotiation process. And where that isn’t possible, a clear, actionable checklist of what needs to be done and by whom, can help.
By ensuring a smooth handover, you can bridge the gap between negotiation and execution, making sure the agreement delivers the intended results.
9. Limited Use of Contract Technology
Is outdated technology holding your contracts back?
The ninth WorldCC pitfall is the limited use of contract technology. Although there is now a huge range of technology that is available, contracting is often under-automated.
Instead of rushing to expensive Contract Lifecycle Management (CLM) systems, start with the basics:
- An intake form: Ensure clear instructions and expectations upfront.
- Document automation: Safely generate contracts from templates quickly and accurately.
- E-signatures: Essential for efficiency and already prevalent in most organisations.
- A repository: A simple place to store and manage contracts.
- Tracking tools: Use kanban boards, ticketing systems, or workflows to stay on top of contract progress.
Where do we find these?
Radiant provides specialised tools as part of our service, but if you are doing it yourself, most can be found within your organisation. Forms (1), a simple database (4), and workflow/ticketing/kanban boards (5) are all already available in your organisation without buying specialised tools. You can get these from platforms like Office365.
Esignatures (3) are prevalent now (Docusign, HelloSign, Box), and you probably got this system in the pandemic, if not before.
Which leaves document automation (2). This is wildly more effective than trying to use GenAI to draft and there is powerful software available that is effectively free (docassemble is open source, it costs $500 a year to host on your private cloud) but you can also get cheap solutions that are easier to edit from the many (hundreds?) of suppliers out there.
Contracting tech doesn’t need a large budget, and the simpler and more customisable the tools you use, the easier it will be to improve them over time.
10. Weak Post-Award Process and Governance
Are you losing value after the contract is signed?
The tenth WorldCC pitfall is weak post-award process and governance. Signing the contract is just the beginning; without proper follow-through, even the best agreements can fail to deliver their full value.
Strong governance ensures that both parties stay aligned and fulfill their obligations. It also opens the door to creating additional value by fostering collaboration and addressing unforeseen challenges.
How do we fix it?
Start by getting the right people involved in governance from the outset. Regularly track what both sides are supposed to do and ensure those commitments are met. Schedule high-level discussions—at least annually—to review progress and explore opportunities for mutual benefit.
One simple but powerful practice? Ask your counterparty how you can make things easier for them. Reducing friction often benefits both parties, creating efficiencies and driving profitability.
A little structure goes a long way. By focusing on governance and maintaining an open dialogue, you can turn contracts into tools for growth and success long after they’re signed.
.jpg)
.png)
.png)
.png)
.jpg)
