Why Are Contracts So Hard to Read? | Scope & Complexity in Contracts

Scope and Complexity in Contracts: The Hidden Deal Killers

Most teams know their contracts have become too complicated. Scope and complexity in contracts can add weeks to deal cycles, inflate legal costs, and erode trust between Sales teams, Legal teams, and Procurement teams. A 2021 Legal Evolution study found that companies with lean, well-structured agreements close transactions 46% faster and slash formation costs by up to 50% compared to their peers. When every extra day chips away at revenue, complexity is more than a legal headache—it’s a growth inhibitor.

This post unpacks why contracts become over-engineered and lays out a practical, data-first playbook to simplify them—without sacrificing risk controls or revenue protection.

1. The Real-World Cost of Contract Complexity

Why it matters for go-to-market teams

• Sales teams watching deals stall lose momentum and forecasting accuracy.
• RevOps sees pipeline velocity drop and CAC climb.
• CFOs/Finan struggle to predict revenue recognition and cash flow.
• Marketing can’t leverage happy customers if the logo is still “in signature."

2. Why We Over-Engineer Contracts in the First Place

• Template sprawl. New regions, products, and compliance regimes spawn one-off templates. Tyler, a finance leader at Elastic, recently admitted their library ballooned to 30+ versions—each with inconsistent risk positions.
  
  
• Legacy risk stacking. Teams add clauses after every major incident but rarely removed once the threat subsides.
  
  
• Legalese culture. Lawyers default to precedent language that’s unintelligible to business stakeholders.
  
  
• Fear of missing edge cases. Teams try to codify every possible scenario, bloating scope grids and liability carve-outs.
  
  

The result? Agreements that are hard to read, hard to negotiate, and even harder to operate against.

3. Why it matters for go-to-market teams

The Language of Contracts: Why Word Choice Matters

The language of contracts can turn a straightforward agreement into a legal puzzle that slows negotiations. When dense legalese and inconsistent terminology obscure intent, stakeholders waste time decoding clause meaning instead of focusing on business outcomes. By standardizing key terms and swapping jargon for clear, concise phrasing, you make every contract more transparent—and dramatically reduce reading friction across teams.

4. How to Read a Contract (Even When It’s 50 Pages)

1. Start with the outcomes. Identify the top three business objectives (e.g., uptime, data ownership, payment terms).
   
   
2. Look for deviations. Use analytics to compare each clause against market benchmarks instead of clause-level comparisons.
   
   
3. Flag ambiguity. Anything that a non-lawyer can’t paraphrase in one sentence is a risk hotspot.
   
   
4. Quantify risk. Assign a favorability score to each section to prioritize negotiations.
   
   
5. Capture insights. Feed structured data back into your CRM and contract intelligence dashboard to inform future deals.
   
   

Pro tip: TermScout extracts over 750 data points per agreement and scores clause favorability against thousands of market-tested standards—no manual review required.

5. Simplify with Data, Benchmarks, and Certification

1. Turn text into data. Convert your contracts into structured datasets so you can analyze rather than review.
   
   
2. Benchmark against the market. See exactly where your terms diverge from industry norms—especially those that slow deals, like indemnities and liability caps.
   
   
3. Surface risk with our contract intelligence platform. TermScout’s contract intelligence solutions surface the exact clauses driving risk and delay—so you can fix them before negotiations start.
   
   
4. Earn trust with Contract Certification and a Contract Trust Badge. A Certify™ Badge signals to buyers that your agreement meets verified market standards, eliminating weeks of back-and-forth.

You might also want to read Why AI Contract Certification Isn’t a Diploma—It’s a Deal-Maker

With just a few clicks, TermScout can transforms your entire agreement into an interactive data model so you can spot hidden risks and streamline deals closing in real time

Frequently Asked Questions

What is the problem with contracts?

Most B2B contracts are drafted in dense legal language, lack standardized structures, and diverge widely from market norms—making them hard to understand and costly to negotiate.

• Sales pain point: Reps can’t quickly answer prospect questions or update deal forecasts because key terms are buried in impenetrable prose.
  
  
• Legal pain point: Counsel spend excessive hours deciphering bespoke clauses instead of focusing on high-value risk analysis.
  
  
• Procurement pain point: Inconsistent templates across regions lead to compliance gaps and audit exposures.
  
  
• Tip: Adopt a modular, data-driven template library. Standard clauses that align with your risk appetite reduce drafting time by up to 60% and give all teams a common language.
  
  

What is the complexity of a contract?

Complexity refers to the depth of nested clauses, cross-references, and ambiguous terms—not just the number of pages.

• Nested definitions: When one clause points to ten others to explain a single concept, reviewers waste time jumping back and forth.
  
  
• Hidden cross-references: “See Section 10.2 for liability limits” makes it impossible to get the full picture in one pass.
  
  
• Ambiguous wording: Vague phrases like “reasonable efforts” or “material breach” spark endless negotiations over interpretation.
  
  
• Tip: Use contract intelligence tools to automatically map cross-references and highlight nested structures. A visual clause map can cut review cycles by half.
  
  

What are the challenges of contracts?

Slow cycle times, high legal costs, value leakage post-signature, and fractured stakeholder alignment.

• Slow cycle times: Every extra negotiation round adds days—studies show each back-and-forth can cost you 2–3 days per deal.
  
  
• High legal costs: Custom drafting and redlining inflate outside counsel bills; you end up paying for repetitive work.
  
  
• Value leakage: Billing errors, missed renewal windows, and improperly scoped services can erode up to 9% of contract value each year.
  
  
• Fractured alignment: Sales, Legal, Procurement, and Finance often work in silos—each party sees a different version of “acceptable risk.”