Alerted by Joy London’s posting on her Excited Utterance’s blog, I’ve read a new blog, lawyer’s dont’ get it by attorney Charles Uniman. Mr. Uniman discusses contracts as code, an interesting idea. One can take his idea even further by getting a bit techie, namely considering the role of XML. 

It would be handy if contract clauses were “marked up” by XML codes. XML stands for Extensible Markup Language and is to content what HTML is to lay-out. That is, XML allows embedding descriptive tags within content so that, for example, one can label the author, abstract, section headings, and body text as distinct chunks of text.

XML could be used to tag clause types so that software could always identify common clause types, for example, indemnification or choice of law. Moreover, XML could also be used to tag the business data in a contract. This could have very high value for clients as it would potentially allow them automatically to integrate rights and obligations embedded in contracts directly into operational systems. For example, in a lease, all dollar amounts and dates could be XML-tagged. Software could then automatically track rent payments due and when renewal or escalation notices need to go out.

Between Mr. Uniman’s idea of “contract as re-usable code” and tagging data elements, there is tremendous potential to reduce the costs of drafting, interpreting, and administering contracts.