Contracts = programs + data

There’s a big difference between a program and a data file.

You could boil an invoice down to a row in a data file or spreadsheet, since it’s simply a flat list of key-value pairs.

Contracts are more like computer programs, since they include elaborate instructions around the data they contain.

This has two implications for contracts:

  1. Data “extraction” won’t work. You need to know the context (i.e. the instructions) surrounding that data because they affect its interpretation. If you only keep a record of the data and throw away the context, you’re looking at an impoverished view of the contract and will make costly mistakes as a result.
  2. You also need to model the logic of the instructions surrounding the data. This allows you to calculate important values that aren’t explicit in the contract itself. For example, if an annual fee is subject to indexation of the greater of RPI and 5%, you want to see what the adjusted annual fee is, not just what it started at when the contract commenced.

Spreadsheets, CRMs, or ERPs aren't designed for this.