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Summarizing a Contract: The Dos and Don’ts
Business contracts often overwhelm would-be shareholders, clients, and employees with pages of legalese, jargon, and fine print. By creating a contract summary, you can condense the essential details into just a few paragraphs. This guide will teach you how to craft effective contract summaries, regardless of the complexity of the original document, and highlight key dos and don’ts.
What Is Contract Summarization?
Contract summarization is the process of condensing a legal contract into its core components. A summary removes legal jargon and complex language, making the document more accessible. Think of it as an outline that includes only the most critical details.
Why Should You Summarize a Contract?
Contracts are often lengthy and filled with technical terms, which can make them difficult to understand. Summarizing contracts is especially useful when dealing with individuals outside your industry, such as shareholders or clients. For example, contract summaries can:
- Highlight urgent issues requiring stakeholder action.
- Facilitate quick reviews of agreements.
- Attract clients or employees unfamiliar with industry-specific language.
- Simplify employee training.
- Enhance collaboration.
Mistakes in contracts cost businesses around 9% of their revenue, according to World Commerce & Contracting. By summarizing contracts, you improve workflow, reduce legal fees, and ensure everyone understands their responsibilities, minimizing errors.
What Should a Contract Summary Include?
A good contract summary typically contains:
- Basic details: Title, date, and parties involved.
- Key terms: Payment details, termination clauses, and critical conditions.
- Plain language: Avoid jargon and legalese.
- Confidentiality clauses: Highlight any sensitive or essential legal information.
Remember, a summary is not a complete rewrite, it is an accessible outline that captures only the key points.
How Long Should a Contract Summary Be?
Contract summaries can vary in length, from a single paragraph to several pages, depending on the audience and purpose. Many executives prefer concise summaries, 200-300 words for quick insights or up to two full pages for more detail.
Steps to Write a Contract Summary Manually
Here are a few key steps you will need to follow to manually write not just a contract summary, but any other summary:
- Read the original contract carefully.
- Consult our guide with 6 summarization strategies.
- Identify key information. Focus on the most important terms and conditions.
- Organize the details. Use bullet points for clarity.
- Simplify the language. Tailor it to your audience’s understanding.
- Seek feedback. Share drafts with colleagues or external reviewers for accuracy and readability.
Alternatively, you can use an AI tool like ReadPartner to create a comprehensive contract summary in a few seconds. Make sure to read the contract carefully beforehand and verify the automatic summary.
Who Will Read Your Contract Summary?
Understanding your audience is crucial. Different stakeholders may require different levels of detail:
Peer reviews ensure clarity and accuracy before finalizing your summary.
How Should You Share Your Contract Summary?
The format of your summary depends on the context:
- In-person meetings: Provide printed copies or use a PowerPoint presentation.
- Mass distribution: Email the summary or share a Google Drive link.
Let the method of delivery suit the situation.
Contract Summary vs. Contract Abstract
A contract summary simplifies a single document for easier understanding. A contract abstract, on the other hand, aggregates data points from multiple contracts for broader analysis. Both are useful tools, but they serve different purposes.
Common Mistakes to Avoid
- Using the wrong template: Ensure the template matches the audience and contract type.
- Omitting essential information: Exclude unnecessary details but keep key terms intact.
- Oversimplifying technical terms: Explain jargon without losing its meaning.
- Leaving jargon in: Use plain language that anyone can understand.
- Failing to track changes: Update the summary to reflect revisions in the original contract.
Additional Tips
- Know your audience: Tailor your summary to their knowledge level.
- Use a template: Customize templates for each client or audience.
- Proofread: A second set of eyes can catch errors or unclear language.
How Can AI Help?
Specialized AI tools such as our own ReadPartner simplify the summarization process by identifying relevant information and filtering out unnecessary jargon. With the ReadPartner Chrome Extension, this process takes even less time. While AI can save time, it is vital to review the output to ensure accuracy and completeness.
In Short
Do:
- Include basic contract details.
- Simplify language for clarity.
- Highlight benefits, risks, and unusual terms.
- Tailor the summary to your audience.
- Proofread thoroughly.
Don’t:
- Leave out critical information.
- Forget to adapt templates for specific clients.
- Use unexplained jargon or technical terms.
Conclusion
Mastering the art of contract summarization can save time, money, and effort while ensuring smoother communication and collaboration. By including essential details and avoiding common pitfalls, you can make complex agreements accessible and effective.
FAQ
Why Should I Summarize My Contract?
To make complex agreements understandable for stakeholders unfamiliar with legal or technical language.
What Should My Contract Summary Contain?
It should include the purpose, title, parties involved, key dates, financial terms, obligations, and any unusual aspects of the contract.
How Can Contract Summaries Boost My Bottom Line?
By ensuring clarity and reducing misunderstandings, summaries improve efficiency, reduce legal costs, and enhance satisfaction among clients, employees, and partners.
How Can AI Help?
AI tools like ReadPartner can draft concise summaries, but human oversight is essential to ensure accuracy.
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