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I would also expect that those charged with better governance might spare a few minutes to question their traditional adherence to the methods by which contracts and disputes are managed. For example, as international trade mushrooms, we all know that the legal system has become increasingly anachronistic and ill-equipped to manage trading relationships. It is no wonder that arguments over governing law and jurisdiction are common. Recent US research has shown that even in a sophisticated and well-developed market like the United States, the courts are weighted against foreign litigants. So why would any right-thinking business person want to lose the advantage of home turf? Surely the only way to reduce the contentious debate is to move to more balanced forms of arbitration or mediation - or perhaps become truly revolutionary and institute different (non-judicial) forms of penalty for specific failures.

Another example where we waste so much time is in the area of liquidated damages. Recent IACCM research illustrated the frequency with which we negotiate such terms - and then either have no mechanism to monitor performance or consistently elect not to enforce the term because 'it would damage our relationship'.

Superior companies that truly focus on customer value will also peruse the list and identify ways that terms and conditions might offer differentiation. Most Favored Customer clauses, Performance Undertakings, Security, Disaster Recovery and Benchmarking are among the examples where creative thinking and innovative approaches can add value through reducing customer risk and increasing relationship loyalty.


“The Home Court Advantage in International Corporate Litigation”, Journal of Law & Economics 2006

“Contract Performance Incentives”, IACCM May 2006

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April 2007