Many people view a contract like a suit of armor. It is there to protect you against uncertainty, and the thicker it is, then the better you are protected.

But relying on a strong contract for protection can lead to unexpected problems. Most of these problems arise from the structure of the contract, as we can see by comparing it with armor.

A suit of armor is made from solid metal plates linked together to cover the vulnerable parts of the body. In the same way, a contract is made up of clauses, terms and conditions, and these are designed to address areas that are perceived as risky.

There is a basic design for the suit of armor, always including the same major pieces (breastplate, helmet, gauntlets). Contracts also have standard clauses, sometimes described as "boilerplate terms."

Armor changed over time, with extra parts being added when new threats arose. For example, later types of armor included the gorget to cover the throat, and greaves to protect the legs. Contracts also evolve, with additional standard terms being developed to address new types of risk.

Eventually the suit of armor covered the whole body, and the person wearing it was completely protected. But it was also heavy, weighing up to 100 pounds. This made it hard for the wearer to move quickly to react to new threats. Some contracts are so complex they hinder us from responding when things change.

Despite all the heavy protection provided by a suit of armor, the wearer could still be hurt by a well-aimed blow that penetrated the joints. While most attacks would fail as they struck the major pieces of the suit, there were weak spots between the plates of armor. Our contracts can also contain weak spots, where important risks are not tackled by standard clauses, and something might slip through the gaps.

So how can we improve our contracts to provide better protection against uncertainty?

Review "boilerplate" terms and conditions. Only include contract clauses that are directly relevant to the situation of the contract. Aim to reduce restrictive terms that hinder flexibility and the ability to respond to change.

Do not rely only on standard contract clauses for protection. Identify gaps where unforeseen risks might get through. Then, develop specific contract terms to cover those areas.

Include specific risks explicitly in the contract. Perform a joint risk identification with all parties, and price each risk, considering both the risk impact and the cost of response. Decide on who can manage each risk most effectively, and record this in the contract.

Where the buyer carries a risk, the contract price can be reduced. If the supplier takes responsibility for a risk, then the cost of that risk should be added to the contract price.

Finally, if we think of the contract as a protective suit of armor, there is a danger that we view our contractual partners as "the enemy." The contract does not exist only to protect the buyer. It is there to provide protection for all contracting parties against the effects of uncertainty.

Instead of seeing the contract as defending "me" against "you," we need to recognize that it offers a way for "us" to tackle risk effectively — together.

We must not be like the medieval knight who believed his suit of armor offered complete protection, only to find himself defeated in battle by a fast-moving opponent who found gaps in his armor. Let's be sure that our contracts are fit for purpose, covering our vulnerable areas, addressing risk effectively, and giving us the best possible chance of performing the contract successfully.