A contract only matters if it works when things get messy. The most common failures I see in commercial agreements are not complex legal issues. They are practical issues. The contract does not match how the business actually operates. The responsibilities are vague. The approval process is unclear. The payment structure creates friction. The remedies do not align with real risk.
Most companies assume their contracts are fine because nothing has gone wrong yet. In practice, this is exactly when the issues are hidden. When a project fails, a deadline gets missed, or when expectations are not aligned, a poorly drafted provision becomes the root of the dispute.
This article outlines Arkline’s approach to building contracts that reflect real operations, stand up in conflict, and avoid the expensive surprises that come from form over substance.
What Makes a Contract Operationally Usable
- Terms that match the actual workflow
Contracts should mirror how the work is performed. Responsibilities, points of contact, documentation requirements, and process steps must be drafted in a way that operational teams can follow without improvising.
- Definitions that eliminate ambiguity
Clear definitions prevent scope creep, conflicting interpretations, and invoicing disputes. Precision at the front end reduces friction later.
- Payment structures that align with performance
Pricing mechanisms should reflect the practical reality: fixed fee, hourly, milestone billing, retainers, passthrough costs, or holdbacks. Misalignment here quickly erodes trust.
- Clear, enforceable remedies
Cure periods, termination rights, suspension rights, and service credits must be practical to use. Remedies that only work in theory tend to fail when needed most.
- Rights and obligations that protect the business from foreseeable risk
Indemnity, limitations of liability, insurance, confidentiality, and data security provisions must be tailored to the type of work, not copied from unrelated templates.
- Processes for change management
Projects evolve. Scope adjustments, added tasks, or shifting timelines need a defined process so changes are authorized, documented, and priced. This prevents silent workloads and expectations that were never formally approved.
- New considerations created by AI
AI has introduced a layer of contractual risk that did not exist a few years ago. Operational contracts now need to address whether AI systems or AI generated deliverables are involved, who owns the training data or outputs, and whether recommendations provided by AI tools are subject to human review. Businesses must clarify how AI is being used inside the workflow, what disclosures are required, and whether vendors rely on third party models that carry their own licensing or compliance restrictions. Failing to identify these AI intersections during drafting can create disputes about responsibility, accuracy, and regulatory compliance that the original contract never contemplated.
Why This Matters
Contracts should be tools, not obstacles. A contract aligned with real operations reduces disputes, protects working relationships, and speeds decision making. It also enhances enforceability because both parties can demonstrate consistent adherence to the agreed structure.
Our Contract Philosophy
We build agreements to accomplish three goals:
- Clarity: The parties should always know what they are responsible for.
- Alignment: The terms should match actual workflows and business priorities.
- Durability: The contract should hold up under stress without escalating every issue into a conflict.
If you want to know whether your agreements are built for the real world, we offer a Contract Fitness Audit that highlights gaps, operational risks, and opportunities to simplify your templates without weakening your protections.
