Top 15 failures in the creation of contracts that make the execution into a potential nightmare or disaster.
Contract creation isn’t just about drafting terms—it’s about crafting a robust foundation for execution. Yet, time and again, we encounter the same mistakes that turn contracts into obstacles rather than enablers.
Top 15 pitfalls in contract creation
Here are my top 15 pitfalls that make contract execution unnecessarily difficult—and why they’re critical to address:
1. No exit strategy
A contract without an overarching exit strategy leaves parties unprepared for the end of the relationship. Whether it’s due to project completion, unforeseen circumstances, or disputes, the absence of a strategy creates uncertainty and risks legal entanglements.
2. Bad or missing exit clauses
Even when exit clauses exist, they’re often vague, impractical, or unenforceable. Poorly drafted clauses can trap parties in unfavorable conditions or lead to costly legal battles upon termination.
3. Bad or not even a change process
Change is inevitable, yet many contracts lack a clear mechanism to manage it. Without a structured process, agreements quickly become outdated, leading to misalignment and execution challenges. For me the end of a contract is a form of change process. How to break up and move on.
4. Fuzzy word use
Ambiguity in contract language is a recipe for misinterpretation. When terms are unclear, parties may have conflicting understandings of their obligations, resulting in disputes and delays.
5. KPI overload
Overloading contracts with excessive KPIs creates unnecessary complexity. Instead of focusing on strategic priorities, parties get bogged down in tracking and reporting irrelevant metrics.
6. Unclear governance structure
When roles, responsibilities, and decision-making processes are undefined, execution becomes chaotic. Clear governance ensures accountability and smooth resolution of issues.
7. Ignoring the allocation of risk
Failing to allocate risks appropriately leads to disputes when unforeseen events occur. Proper risk-sharing mechanisms protect both parties and ensure fair handling of challenges.
8. Over-Reliance on boilerplates
Copy-pasting standard clauses without tailoring them to the agreement’s specifics often results in irrelevant or unenforceable terms, weakening the contract’s effectiveness.
9. Lack of focus on relationship management
Contracts that prioritize legal formalities but ignore the relational dynamics set the stage for mistrust. A strong contract fosters collaboration and mutual understanding.
10. Poor documentation of assumptions
Assumptions made during negotiations often remain undocumented, leading to misaligned expectations. Proper documentation ensures clarity and alignment from the outset.
11. Failure to address End-to-End lifecycle
Contracts often focus solely on signing, neglecting execution, monitoring, and renewal phases. A comprehensive approach ensures the agreement remains relevant throughout its lifecycle.
12. No dispute resolution mechanism
Disputes are inevitable, but many contracts fail to outline a clear process for resolving them. Without this, conflicts escalate unnecessarily, damaging relationships and delaying execution.
13. Unrealistic deadlines
Setting impractical timelines creates undue pressure on both parties, leading to rushed work, missed milestones, and strained relationships.
14. Failure to consider external factors
Many contracts overlook external influences like regulatory changes, market dynamics, or force majeure events. A robust agreement anticipates and accommodates these variables.
15. Overcomplicated legal jargon
Contracts written in overly complex legal language alienate stakeholders who aren’t legal experts. Clear, accessible language ensures all parties fully understand their obligations.
Why This Matters
Contracts are more than just legal documents—they’re the backbone of successful business relationships. By avoiding these common pitfalls, you can ensure smoother execution, stronger collaboration, and better outcomes for all parties involved.
And is this list complete, no, it is why there are checklists out there that help you further. The key point I wanted to make here is that if procurement and sales dont talk to contractmanagement or customer success management there is a setup for issues and potential failure.
Arjen van Berkum
Arjen van Berkum is a columnist, keynote speaker and motivator, with an eye for business ecosystems, innovation and disruption. In addition to his work as technology and contract management evangelist, he is a visiting lecturer at Delft University of Technology (TU Delft).
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