90% of the benefit comes from the first 5-6 categories.
After that you get diminishing (and then negative) returns.
This applies surprisingly broadly to organising information of many different kinds, whether contracts or otherwise.
Create more categories and you create more of a maintenance burden. Even if you stick to your strict system, your colleagues won’t. And it’ll be more brittle in the event of a department reshuffle.
In almost all cases, the system will end up worse than if you’d kept it simple.
If more categories are necessary, it will become painfully clear.
Much easier to start simple and only add complexity where it’s needed.