User-Centered Contract Design: New Directions in the Quest for Simpler Contracting

Stefania Passera & Helena HaapioUser-CenteredContract Design:New Directions in the Questfor Simpler ContractingIACCM Academic Forum, Tempe, AZ,26.10.2011

User-centerednessis a fundamental principle in the design of artifacts thattruly support their users in performing a given task andachieving their goals. We consider it in our products, services, furniture, experiences, interfaces... why not in our contracts? © 2011 Stefania Passera & Helena Haapio

Why do we “accept”our contracts to beuser-unfriendly?This paper contains initial suggestionsand methods on how contracts can bedesigned keeping their users in mind. © 2011 Stefania Passera & Helena Haapio

Methodology holmström & al., 2009 design science = problem theoretical solving & evaluation 1 - design with users 1 - literature review (ongoing) 2 - prototyping 2 - evaluating results 3 - re-iterating © 2011 Stefania Passera & Helena Haapio

Methodology LAW MGMT DESIGN COGNITIVE holmström & al., 2009 SCIENCES design contracting design information cognitivecreate and test thinking design overloadexamples of science proactiveuser-centered law knowledge humancontracts visualization factors plain user = language in law experienceuser-centeredfocus in all ofthe contracting problem theoretical solving & evaluationprocesschange companymindset, embed 1 - design with users 1 - literature review (ongoing)design thinking 2 - prototyping 2 - evaluating resultsin the culture 3 - re-iterating © 2011 Stefania Passera & Helena Haapio

Notions from theorymain points- Primary contract users are people implementing the contracts in operational and delivery team, but contracts seem to be drafted for a legal audience (the secondary users): the design of contracts is mostly user- uncentered!- At the moment the focus is unbalanced towards design rather than communication of contractual information. Contracts are complex by nature, so it is crucial to minimize cognitive overload and support their implemenation: clarity > understanding > faster decisions > actions > results- Plain language and plain visual design can help knowledge transfer. © 2011 Stefania Passera & Helena Haapio

Ourto the experimentsinputs suggestion1) rethink who is the primary user of your contract, and what does that imply2) use a language (verbal and visual) and an information structure that your user understands and finds useful3) focus on knowledge transfer all along the contracting and delivery process: contracts don’t get things done, people do © 2011 Stefania Passera & Helena Haapio

Examples real world1 from the C Does either party want to NO flowcharts Sheet 3 refer the dispute to Example of how the tribunal? visual language can YES clarify a complex pro- F Has cess, where this dispute been NO o referred to the Adjudicator? r different steps and ac YES DECISION IN TIME? NO many alternatives a 93.4 93.4 are present. d Has the Adjudicator YES Is a Party dissatisfied Flowchart can audit notified his decision with the Adjudicator’s e within the time decision? allowed? the correctness of NO YES m your logic (= dead ends ic 93.4 YES Has a new & contradictions are NOTIFY u Adjudicator been chosen? IN TIME? se 93.4 made visible) NEW 93.4 NO A Party may refer a dispute to the ADJUDICATOR? Neither Party may refer a dispute to tribunal if Does the tribunal unless they have notified NO the Party is dissatisfied with the a Party notify within the other Party of their intention to Adjudicator’s decision or the time? do so not more than four weeks o the Adjudicator did not notify a decision after the end of the time allowed for within the time allowed and a new Flow charts the Adjudicator’s decision adjudicator has not been chosen n YES ly This dispute may This dispute nec3 contract REFERRAL TO NO REFERRAL be referred to the is not referred TRIBUNAL tribunal to the tribunal TO TRIBUNAL flowcharts © 2009 nec. Used with permission. FinishFlow chart 93 and 94 Sheet 4 of 4 © 2011 Stefania Passera & Helena HaapioDispute resolution

Examples real world2 from the pathclearer Example of how a different approach (leaving much to general law; easier termination clauses based on “business sense”) can drastically reduce the length of a contract. © 2011 Stefania Passera & Helena Haapio

Experimentscase1Co-designing a more usable framework agreementConsulting and creating examples with a partner company:PHASE 1: interviews & co-design PHASE 2: re-drafting. The original PHASE 3 (ONGOING): producingworkshops. A team of different framework agreement, 24 pages, and user-testing visualizationsprofessionals visualized together was reduced to 10 pages, and in a to be included in the frameworkthe contracting process and the rela- second moment to just 3. agreement (process blueprint,tionships with their sub-contractors. delivery terms, material flow, cash flow, information flow, ... ) § © 2011 Stefania Passera © 2011 Stefania Passera & Helena Haapio

Experimentscase2Visualizations to enhance the usability of standard termsCreating and testing flowcharts for YSE (General T&C in constructions in Finland) we are here 2012 PHASE 1: one of the company’s PHASE 2: production of examples, PHASE 3: test the text-only version legal counsel is cooperating with co-designing examples hands-on, against the visually-supported us, choosing the clauses and the correction and re-iteration, version of YSE in order to measure perspectives to be adopted in the involving more people in the case if understanding, velocity of use flowcharting process. so as to get input and feedback. and information retention improve. YSE 1998 - VISUALIZATION OF CLAUSES 19-23 REASONS THAT ENTITLE THE REASON THE CONTRACTOR TO FOR DELAY IS ... ADDITIONAL COMPENSATIONS §20 Force Majeure: §23 §19 §19 §23 §44 §50 §35 §46 §44 Actions of the client (e.g. A sum of several minor Modification to the building The contractor must present the contractor Other reason that the Other contractors or suppliers Force majeure causes interruption Delay in the completion of client neglects to fulfill reasons emerged during plan is such that it extends a written demand for extention, Additional work, defined in §43 Building plan modifications is entitled to contractor believes entitles of the client create an in the works and loss and damage the work for a reason due to his obligations to cooperate) the building period the building contract period together with the tender of the extension, him to an extension interruption to the works to the contractor the client modification works. however... At the risk of forfeiting The demand for extension The force majeure reason is A contractual penalty was The increases payable, the price The contractor has to submit The contractor has fulfilled The reasons for delay YES The contractor receives the right to do so in is made no later than exceptional weather conditions agreed in advance? and the completion period must a detailed tender of the effect Modifications increase his own obligations to the happened within the a compensation other cases ... 2 months before the end YES be agreed in writing before the of the building plan modification the costs for the YES corresponding to the extent possible at any 6 months prior to the additional work is begun on the contract price contractor given time of the building contract cost increase extension demand §19 period NO 2 mo. 6 mo. YES NO DEMAND The contractor has notified START END valid demands period valid reasons period Cost calculations take into account in writing the client as soon the shifting of the construction as the threat of suspension YES YES NO Prices or equivalent principles to period to a less or more 1) if the obstacle concerns of work or delay arose §23 §23 calculate the cost of the modification Modifications diminish Reduced costs are due advantageous time of the year procurement of construction goods §23 are present in the contract the costs for the YES to an innovation on the AND the constructor has failed to contractor part of the contractor procure construction goods that are available elsewhere with no NO significant extra time/costs; or The client compensates the NO YES NO The agreed amount is payed NO YES NO NO NO NO YES to the contractor additional costs incurred by 2) if the obstacle is due to a strike, the contractor The cost of modification is agreed through some boycott or embargo, it is caused other equivalent principle by the contractor or his sub- The client receives a The client receives a contractor failing to fulfil his reimbursement reimbursement contractual or legal obligations to NOT ENTITLED TO reduced by an amount corresponding to the his employees, their employee NO AN EXTENSION OF agreed by the parties cost reduction organisations or employers’ THE BUILDING associations; or CONTRACT PERIOD The client compensates the contractor The client contributes also to other costs Work is carried out at for servicing, protecting, maintaining, incurred by the contractor: YES cost price 3) the obstacle concerns work heating (and other energy costs) the construction site. - 2% of the average daily cost of the building already delayed for a reason due per working day, for the first 5 days of to the contractor NO interruption ENTITLED TO - 1% of the average daily cost of the building AN EXTENSION OF per working day thereafter 1) 2) or 3) applies... THE BUILDING Client carries out the work CONTRACT PERIOD Contract price (- VAT) Average daily cost = ___________________ Number of working days in the building period YES Tender is calculated on those No additional payments or reimbursements are due to the contractor © 2011 Stefania Passera & Helena Haapio

Results & Conclusions { 1) people in companies “are hungry” for clearer, more synthetic documents interviews 2) knowledge transfer is both perceived as crucial, but currently “not enough” 3) visualizations created engagement and interest about the topic in the company { 4) visualizing can be more relevant than visualization in terms of knowledge transfer 5) it is important to maintain a balance between minimalism and legal safety.user feedbackobservations,experiments, Attention: you need to summarize, no impoverish the content! 6) Culture & mindset: there is a need to nurture design thinking and visual literacy in companies in order to promote -in particular- the introduction of user-centered contracting and -in general- more sensibility towards user experience. 7) more examples and tests are needed before envisioning concrete practices and a theoretical framework for user-centered contracts and contract visualization © 2011 Stefania Passera & Helena Haapio

User-Centered Contract Design: New Directions in the Quest for Simpler Contracting

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User-Centered Contract Design: New Directions in the Quest for Simpler Contracting — Presentation Transcript

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