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The Association of Corporate Counsel (ACC) is the world's largest organization serving the professional and business interests of attorneys who practice in the legal departments of corporations, associations, nonprofits and other private-sector organizations around the globe.

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Overview

In a commercial setting, a contract is much more than offer, acceptance, consideration and mutual assent. The contract is the manifestation of the relationships developed between the parties to the contract. The strength of the relationship will ultimately be reflected in the terms of the contract in either a positive or negative direction. The employees charged with managing the relationships will fall on either side of the seller/customer divide of a company, which commonly reside with the Sales/Marketing/Business Development department on the seller side and the Procurement/Purchasing department on the customer side. The employees within these departments are not attorneys or hold a Juris Doctor degree, but will be the major driving force behind the terms and conditions that end up in the final contract. Contract Training represents one of the early stages of the contract lifecycle that an organization's Legal Department must manage or directly support.

This Quick Counsel will provide a brief overview of key issues in the contract training of non-attorneys, including understanding the non-attorney audience, placing training in context of larger company vision, and fostering open discussion.

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Know Your Audience

Contract Law was one of the least favorite classes for law students during their 3 to 4 years in law school, with only Civil Procedure holding the distinction of being the least favorite of all. Keep in mind this general disdain for being lectured to about contracts and then multiply it by 10 to 20 times, as this is likely how your audience comprised of Sales/Marketing/Business Development and Procurement/Purchasing professionals will feel about contract training during business hours. The Contract Training is not a time to impress all your colleagues with useless history lessons on the common law and quotes from Prosser and Murray. Contract Training is the time to target the day-to-day situations that your audience deals with and then put them into context on how their situation is or is not addressed in a contract. Determine the area of the business that constitutes your audience and tailor your training to them. The agenda for the Contract Training will naturally flow from analyzing your audience and what tools you want them to be equipped with at the end of the training.

If your audience will be international, you should tailor the Contract Training to the local customs and practices of your business in addition to overcoming the language barrier. All of the presentations and materials that are easily revised for a US based training quickly become challenges as you must rely on local outside counsel or a translation service in order to adapt the training to your international audience. This can be costly and time consuming.

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Train with Vision

Every company has a vision statement and defined business goals. The Legal Department has (or should have) a vision statement and defined business goals that compliments the visions and goals of the business. The Contract Training, as an extension of the Legal Department's role in managing risk, should encompass the spirit of the company's and Legal Department's vision statement and defined business goals. This is your opportunity to make it clear to your company's employees how the organization and Legal Department intends to do business. For an international business working across different cultures in different languages, this is both particularly important and challenging.

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Explain Your Policy

Just as the Contract Training is an extension of the Legal Department's role in managing risk and encompasses the spirit of the company's and Legal Department's vision statement and defined business goals, so is the Contract Policy. The review of the Contract Policy should immediately follow the initial introductions and review of the Contract Training's agenda. Explain the role of the policy in supporting the organization's and Legal Department's vision and reaching its goals. Employees tend to view corporate policies as a necessary evil, with the Legal Department and the Contract Policy representing another hurdle for the Sales/Marketing/Business Development and Procurement/Purchasing professionals to overcome as they work to increase profits and reduce costs. Overcoming this perception altogether is not realistic, but what is realistic is instilling an understanding into your audience that the Contract Policy is a tool that will assist them in maximizing the Legal Department as their dedicated legal resource and allow for a greater level of support in assisting them reach their goals of increased profits and reduced costs.

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Provide Context

As the Contract Training progresses, the discussion of risk management and the Legal Department's role in managing it will eventually transition from a high level introduction into a more in-depth analysis that addresses specific areas of the contract that present undue risk to the company. An effective Contract Training will present the undue risk along with establishing the level of tolerance that the organization and the Legal Department have for such risk. This is the point of the training that must target the day-to-day situations that your audience encounters within the context of how their situation is or is not addressed in a contract. For example, rather than state that the Contract Policy requires a mutual termination clause in the contracts it enters into for raw materials; explain why the organization requires the ability to terminate such a contract. The reasons may vary from organization to organization, but a major consideration in having the ability to terminate a supply contract is the ability to end a contract that contains unfavorable pricing in favor of another contract that contains favorable pricing. The members of the audience that are in Sales/Marketing/Business Development will want to pay particular attention to this contract term because a prematurely terminated contract will impact their sales forecast in a negative way. The members of the audience that are in Procurement/Purchasing will want to pay particular attention to this contract term because they will want to have the ability to move onto a new supplier if more favorable pricing terms can be obtained. Contract trainers should highlight these distinctions for your audience on each and every concept or provision reviewed during the Contract Training.

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Be a Facilitator for Open Discussion

The in-depth analysis of the areas of the contract that present undue risk to the company is the period of the Contract Training that you are most likely to lose your audience. Smart phones have been turned off for sometime now and coffee cups are in need of a refill so this point of the Contract Training presents a great opportunity for a 10 - 15 minute break to ensure that you have the maximum attention of your audience. This is also an opportunity to keep your audience engaged by conducting the training as an open forum that encourages audience participation rather than lecturing on the differences between indirect and direct damages and the subtle derivations of limitation of liability clauses.

An effective training tool for this phase of the Contract Training is to review an actual contract with your audience that highlights major legal and business concepts and the corresponding pros and cons of the provisions that contain such concepts. In preparing this training tool, revise the language within the contract to be clearly one-sided in favor of one party or another (remember Consideration #1) to the point of obviousness and utter ridiculousness. Attorneys are trained to work in the gray areas addressed by the provisions of a contract and a Contract Training will not afford enough time to train non-attorneys on legal concepts that are anything but black and white. As the training works through the contract, engage the audience into explaining what issues they see with a certain provision. Have them explain to the rest of the audience how they as a Sales Manager or as a Procurement Specialist feel a provision of this nature is favorable or unfavorable. The trainer is now a facilitator who helps channel the issues raised by participants into organized and relevant ideas while encouraging people to share and exchange their thoughts, opinions and experiences.

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Certify Comprehension

The hallmark of an effective Contract Training is the audience leaves the training equipped with the tools to be an extension of the Legal Department in managing and protecting the company from risk - and the audience has not forgotten them by lunch. Finish up the Contract Training with some type of activity that will confirm the audience was listening and understood the information presented to them during the training. A multiple choice quiz or a modified version of Jeopardy!'® will give your audience one last opportunity to demonstrate their understanding as well as provide the trainer with an opportunity to highlight the major takeaways of the training.

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Conclusion

These considerations for contract training of non-attorneys are not an all-inclusive list and may or may not be applicable to all companies. What these considerations do is encourage in-house legal departments and the attorneys charged with contract training to develop a training program that aligns the program with the company's and department's vision and goal. In-house counsel should also develop a training program that will provide its clients with confidence in their understanding of contractual language and identifying undue risk.

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Web Resources

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Published on December 1, 2011

The information in any resource collected in this virtual library should not be construed as legal advice or legal opinion on specific facts and should not be considered representative of the views of its authors, its sponsors, and/or ACC. These resources are not intended as a definitive statement on the subject addressed. Rather, they are intended to serve as a tool providing practical advice and references for the busy in-house practitioner and other readers.
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