Have you heard the one about the lost contract that made everyone break out in a cold sweat? No? Then you’re lucky, because it’s not that unusual.

A case in point: my (true) story about a ‘lost’ factory lease agreement.

This document was actually stored on a shared drive by an individual who subsequently left the business. With the lease due to expire, the landlord (oddly) said nothing to the business but instead found a new tenant and signed a new lease agreement with them.

When the original tenant found out, the landlord cheerfully informed them that they needed to vacate the building within the next week, before the new tenant moved in. That’s when things got real.

In the end, after quite a scramble, the business managed to convince the landlord to honor a renewal, but only after the incoming tenant was handsomely compensated for the disruption.

It could be that the landlord was taking advantage of an opportunity… but notwithstanding the whole episode was hugely expensive and entirely avoidable. So, what went wrong?

Not an isolated problem

I think the root of the problem was twofold: the business had not mandated where contracts should be stored nor how contract obligations should be tracked and managed. But in my experience, this isn’t particularly unusual. It’s not uncommon for in-house lawyers to lose track of contracts as soon as they’re signed.

Thereafter, contracts are regularly misplaced because they’re filed any-old-where in a fragmented information environment of shared drives, email folders, desktops and wherever feels convenient.

Or they can somehow become inaccessible, maybe on a redundant system. Or there’s confusion because a contract exists in multiple versions in different places. And contracts get entirely forgotten about, particularly when there’s churn. All of which can be costly in lots of ways.

Operational penalties

Lawyers can spend a lot of precious time searching for contracts. So, there’s a clear impact on productivity. You might also need to factor in the time eaten-up by recreating contracts – and potentially the added cost of having to get that done by external counsel.

Hand in hand with mislaid contracts is poor, or no, contract lifecycle management. That leads to revenue leaks, because of a failure to enforce a contract’s service levels or payment terms, or missing out on renewal dates or termination windows or price adjustments etc.

There can be operational penalties. Maybe you just need access to a contract to effectively and efficiently renegotiate it or negotiate a similar one, or to make some timely, well-informed commercial decisions.

There’s a danger of heavy regulatory and legal consequences. What if a court asks to see a contract, or it’s needed for an audit or to demonstrate some kind of compliance and can’t be found? It could leave you with an adverse judgment or a substantial fine.

Poor contract lifecycle management heightens the risk that data leaks or that commercially sensitive information falls into the wrong hands.

And there’s always a risk of reputational damage and the real cost of looking incompetent in front of clients, suppliers, regulators, your competitors and even your own people.

Major and minor failures

According to recent research, organizations are losing 8–10% of contract value due to poor contract lifecycle management.[1] It can clearly cause major failures.

Yet the likely reality is that for every big, measurable, gaff there are countless fairly minor incidents that cumulatively lead to persistent value leakage, operational drag, extra pressure on lawyers and elevated risk to the business.

All of which is entirely avoidable, because modern document management systems can eliminate the challenges of contract location and contract lifecycle management.

[1] https://info.worldcc.com/contract-management-aug-2025