Have Contracts Become Commoditized?

As an advisor to a Boston Venture Capital firm, I actually think about these issues. My short answer is in some ways yes and other ways no. Let me explain.

There are many websites that provide simple contracts for less than $100, and they could be a great place for a small company to start from. Of course, as an attorney, I would recommend they talk to an attorney before the contract is used (to make sure it works for them, is enforceable, etc.). Some would argue that these contracts have been commoditized, and if so perhaps this is a good thing. 

However, I think there is another set of contracts which have not been commoditized and maybe this is a good thing too (complex agreements, agreements which are not self-explanatory or easily understood, and software/IT contracts). While the first few categories are easily understood, I think that software and IT agreements are unique agreements, and any company seeking expansion capital should remember this. In the software and IT world, the contract serves an additional purpose; it further explains what the customer will be receiving (as no tangible item is provided). These contracts play a much more important role (arguably more than any other industry) as they must also communicate, explain and describe what the seller will be providing and what the buyer should expect. For example, I propose that a license agreement for one company should not be used, without review, by another company as their licensing models may not match (license metrics, support and renewal terms, restrictions, other unique attributes of their licensing model). 

As part of any business growth strategy in the software and IT world, contracts play their part. I suggest that in this world contracts have not become commoditized. I am not saying don’t buy one from a site that sells them for $50, but I am saying if you do, have it reviewed by an attorney who is very familiar with contracts of that type.