What historically has been the easiest way to make lawyers cringe? Have a sales or business executive say, “Don’t worry about it, the deal is a wrap. We shook on it.”
Oral, handshake agreements may inspire amiable relationships. But they don’t deliver much in the way of evidence to support future disagreements.
That is, until recently. Novel uses of AI-backed, multisensory technologies now challenge our traditional assumptions about the enforceability of oral agreements. And it’s just one of some recent fundamental shifts in digital communications that require lawyers to open their minds to new possibilities in the legal landscape.
From Oral to Written Contracts
On the whole, unless required by law, contracts do not have to be in writing to be legally acceptable. However, that leaves them open to interpretation and the terms are typically unclear and uncertain. When conflict arises, neither side can provide tangible or definitive proof to support their version of events.
Nature abhors a vacuum, and the law abhors ambiguity. That’s why lawyers and courts have prioritized the much-enhanced clarity and certainty of written contracts over verbal agreements for centuries.
But now, new audio-visual communication capabilities are changing that view. From the first clay tablet to the most recent iOS or Android tablet device, emerging technologies always have brought new capabilities that changed humankind’s communication methods.
The breakneck speed of technological advancement today, combined with technology’s increasing use and popularity means the ways we can express contracts is also evolving. It’s increasingly vital to stay up to date with the nuances of new technologies to understand how to guide business clients with more foresight as we enter a new era of innovation.
Memorializing Verbal Agreements
Business is increasingly conducted through audio-visual communications. As our work lives grow more digital, business executives have more opportunities to use web-conferencing platforms and voice recording apps that capture verbal conversations and record them for posterity.
We can now also feed those audio files into transcription software tools that use AI to convert spoken language into text. Apps such as Otter.ai and Fireflies.ai can record and reproduce speech as text in real time to generate instant transcripts of dialogue.
We’ve long been able to record and manually transcribe dialogue. But modern apps are more pervasive, in our hands and on our smartphones, and capture more of the most crucial moments.
Speech-to-text tools are easy to use, cost effective, and increasingly more accurate. Transcription tools also now offer the ability to categorize transcripts, add comments, and search across transcripts to find and share key moments.
In other words, we now have the capacity to ensure that our replays of oral conversations are crystal clear, bringing the phrase “in no uncertain terms” to bear in real life. And the terms of many handshake agreements can be readily available at any time.
Text-Only to Visually Supplemented Digital Assets
Another important factor about today’s contracts is that they often solely exist in digital form. For the first time in history, companies can use software to automatically collect and analyze contract data and put performance, obligations and terms, milestones, and timelines under the digital microscope.
Text-only paper contracts are also transitioning into visually supplemented digital assets. Many contracts now also include comics, illustrations, symbols, animated characters, and other visual cues that help consumers, employees, and business partners better understand legal terms and concepts.
Enhanced forms of communication help serve as digital handshakes. With these new tools, companies can build more transparent business relationships with consumers and employees. Individuals can better understand their rights and responsibilities, and fewer disputes can arise.
Handling contract review, inquiries, and disputes consume much of a legal department’s time. A compelling economic argument exists for speeding the transition from text-only agreements to more inclusive, image-based legal contracts.
Multisensory Media Will Lead to Multisensory Contracts
At the same time, virtual reality, augmented reality, and other multisensory technologies enable us to simulate real-life activities in the digital landscape.
Consider sound-producing imagery such as The Sound of Taste, an interactive poster that plays the chords of a piano as people run their fingers over its design. Sublimotion uses immersive technology such as dynamic lighting and projection mapping to transport diners to various locations around the world to enhance the dining experience.
Combining the technology we now have with what’s possible in the near future, it’s not too difficult to imagine digital contracts that speak to us in our original voices, or to envision visual projections that clarify the parties’ expectations during negotiations.
Overcoming Limitations of Non-Written Contracts
One of the many benefits of the trend toward audio-visual communication is the ability to overcome limitations of non-written contracts. Handshake agreements are a time-tested tradition for trusted parties to close deals quickly. They often enable business leaders to agree on more mutually beneficial terms than their respective lawyers might accomplish during extensive redline negotiations.
Lawyers who embrace working with new communication technologies will be ready for the return of handshake agreements and prepared to proactively enable business teams to thrive amid modern complexities.
If you’re ready to start prioritizing opportunities for business simplification, I am, too. Shall we shake on it?
This column does not necessarily reflect the opinion of The Bureau of National Affairs, Inc. or its owners.
Olga V. Mack is the CEO of Parley Pro, a next-generation contract management company that has pioneered online negotiation technology. She focuses on improving and shaping the future of law, having led for decades as a general counsel, operations professional, startup adviser, public speaker, adjunct professor, and entrepreneur.