Everyone should know about a new movement: open source contracts. Products and services would be sold under terms posted online by uninvolved third parties — and widely accepted by the community of customers and providers. The parties could avoid or reduce negotiation and drafting by adopting those contracts.
Like open source software and content, but with added issues …
These open source contracts would operate a lot like open source licenses for software (e.g., GPL, BSD) and content (e.g., Creative Commons). But the analogy isn’t perfect. Open source software licenses are not contracts. They’re permissions granted to the entire world. So they don’t need much customization. Contracts generally do call for customization. We’d find it difficult, for instance, to lay out terms that work for every SaaS offering.
Therefore, while some deals might incorporate open source terms wholesale, others would need additional terms. Those terms would be customized to fit (a) the details of the provider’s product or service and/or (b) any special terms agreed between the parties.
Still, the parties could still skip a lot of negotiation and drafting by accepting most of the community-approved open source terms. They’d just negotiate and draft short “add-ons” to those terms … faster and at lower cost.
Models for open source contracts
Teams of expert could create the open source contracts. They’d work together to craft balanced terms. Or the contracts could “evolve” through usage. That’s how open source software evolves. (I mean the software itself, not the licenses.) In the latter model, contracting parties would modify open source terms to fit their deals and share the updated terms back to the community. So any one of us could check which terms have been most widely adopted for our deal’s type of product or service.
What about our jobs?
What about us lawyers and contract managers? Will this put us out of work? Each new technology and technique creates that risk. But it doesn’t often actually happen, at least to professionals. Rather, new techniques help professionals do their work faster. That means they can handle more projects — in this case, smaller contracts, which otherwise wouldn’t merit professional attention. In other words, if the parties can easily agree on most terms by accepting an open source contract, the negotiated share of the terms shrinks. So we can spend less time per contract and work on smaller deals.
Also, professional jobs often expand as a result of automation and new techniques. The time freed up gets used on activities never imagined before. For example, the number of bank tellers rose after adoption of the ATM. Yet the ATM stole much of the bank tellers’ work.
Still, I think this movement does create some long-term risk related to legal jobs. Either way, though, I think there’s no stemming the tide. Better to ride it. Better to become expert at the new thing …
This movement is just starting, so I can’t point you to many open source contracts ready for use. Nor can I predict how this will evolve (or even whether it’s going to take off). But a non-profit called CommonAccord has begun posting contract terms on GitHub. (That includes some of my model contracts, which I provided free of charge.) And a startup called Bonterms has started posting open source contracts too.
FYI, I provide many of my own contracts and contract terms free of charge, here at TechContracts.com. They’re provided under our own license, but we could someday change to a Creative Commons license.
If you know of other examples, I’d love hear it! And I’d love to hear what you think about the future of our jobs. Please let me know in the comments below.
© 2021 by Tech Contracts Academy, LLC. All rights reserved.
Thank you to Pixabay.com for great, free stock images!