I recently did an Ask the Expert conference call with my friends at the International Association of Contract and Commercial Management (IACCM), of which I’m a long-time member. The host of the call, IACCM vice president Paul Mallory, started out by asking why I’d written the Signing a Business Contract? A Quick Checklist for Greater Peace of Mind e-book (then titled Before You Sign a Business Contract). Here’s a slightly-edited version of the script I wrote for my response to that particular question.
A few years ago, I was greatly impressed by a book called The Checklist Manifesto, by Dr. Atul Gawande. The book rose to #3 on the New York Times best-seller list. Dr. Gawande is a surgeon at a top-flight hospital in Boston. He’s also on the clinical faculty at Harvard Medical School. He was a Rhodes Scholar and received a Macarthur Foundation genius grant. He’s written several books; I’ve read a couple of them; they’re excellent. You might have read his articles in The New Yorker; President Obama cited one of them during the debate about the health care bill.
The Checklist Manifesto wasn’t about long, detailed checklists (that likely won’t get followed). It emphasized using short, simple, last-minute checklists. Small but important things. The kind that pilots have used for decades, just before taking off on a flight. Stupid stuff: Do we really have enough fuel to get where we’re going?
Gawande’s book explained how some hospitals had started using this kind of last-minute checklist just before surgeries. These hospitals had dramatically reduced their rates of post-operative infections and other complications.
Apparently, many surgeons initially resisted the idea: I don’t need a checklist. I know this stuff. Checklists are for rookies.
But doctors are human (no matter what a few of them might think). The fact was, surgical teams often overlooked one or more important steps. That caused lots of problems. Patients sometime died.
Gawande tells of how one of his own patients almost died: during an extremely delicate surgical procedure, Gawande accidentally tore the patient’s vena cava, which is a catastrophe. The patient could easily have bled out in a minute or so if enough replacement blood had not been on hand. And that might well have happened: Just before the first incision, in working through their last-minute checklist, the surgical team discovered that the blood bank had not pre-positioned extra blood. The team made sure this was corrected before they proceeded. It paid off: the patient lived, because the surgical team had followed the checklist.
(That story brings up a saying I first heard in the Navy: You don’t get what you expect, you get what you inspect. The Navy nuclear engineering program was where I had my own first exposure to the discipline of checklists. Checklists are practically a religion there — they know even the brightest people will make mistakes.)
Anyway, Dr. Gawande’s book struck a chord with me. In my legal career, I’ve encountered any number of situations in which smart people overlooked obvious stuff. In particular, I’ve seen clients and others who got themselves into trouble by signing contracts that clearly had problems. It occurred to me that this was one area where a checklist could be useful.
One of the lessons in Gawande’s book was that you can’t ask people to use a checklist that’s too long; chances are that they just won’t use it. If you’re developing a checklist, you have to focus on what will give you the most bang for the buck, the greatest return on your investment.
So I tried to figure out: What checklist items would I most want a client to verify if they were signing a contract without consulting a lawyer? The short “Signing a Business Contract?” checklist is a first pass at an answer. It’s essentially my personal best judgment about what contract signers most need to verify before they put ink on the signature line, with commentary and explanations.
I would love to get feedback from others, with an eye toward future revisions.
[Revised 2011-09-12]
See also: (list is automatically generated)
Contract review: A final checklist
