The purpose of contracts

In 2009 and 2017, the International Association for Contract & Commercial Management (IACCM) conducted comprehensive surveys to explore the multifaceted purposes of contracts in business.

The surveys reveal broad recognition that contracts are not typically viewed as a source of competitive advantage, but confirm there is desire for improvement. Respondents suggested that business leaders could enhance contract performance through establishing clearer ownership, more thought being given to the alignment between business goals and contract policies, investment in better tools and systems, and reform aimed at simplification and standardization.

The pandemic and subsequent market volatility led many to recognize the gaps and deficiencies in their contracts. In general, organizations relied upon their relationship to work through the performance issues and challenges they confronted. So, has this led to new thinking and fresh approaches to contracting?

This report revisits the 2017 study to assess whether there have been improvements in how contracts are perceived and utilized. We aim to understand if business practices and contract terms have evolved, particularly in light of the increasing importance of institutional trust and corporate integrity. By examining the changes and continuities in contract performance, we seek to provide updated insights and recommendations for optimizing the role of contracts in achieving business objectives.

Anyone reading this report is likely to conclude that their approach to contracts and the contracting process requires urgent review.

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