Methodology

TermScout reviews and rates contracts and contract provisions from the perspective of a typical customer.

 

Methodology Overview

  • Our contract reviews are conducted by experienced attorneys using our proprietary methodology, technology, and templates.
  • Reviews are done in a standardized manner. We assess and measure hundreds of variables in every contract we review. We use the exact same variables in every contract, enabling us to create industry data and comparisons with integrity.
  • Ratings are assigned objectively based on a pre-determined list of positive and negative attributes. What constitutes a positive or negative attribute is determined by a panel of expert lawyers experienced in the field and is generally aligned with the IACCM Contracting Principles – an independent third-party set of principles for creating balanced commercial contracts.  Our ratings can be interpreted loosely to mean the following:
    • Extremely Favorable: So favorable to the customer that most vendors would negotiate if they had leverage.
    • Favorable: More favorable to the customer than usual.
    • Balanced: This is somewhere in the middle, and represents some wins and compromises for both parties.
    • Unfavorable: Less favorable to the customer than usual – customers with significant leverage might negotiate these.
    • Extremely Unfavorable: So unfavorable to the customer that most customers would negotiate if they had any leverage.
  • Because contracts frequently contain vague, ambiguous, or otherwise unclear statements, we assign confidence levels to every finding in our reports. These can be used to help users understand TermScout’s general level of certainty on findings.  If confidence levels aren’t shown in the report you received, you may request a copy of the confidence levels from us.
  • For each topic area in a contract, we typically show how those provisions stack up against both the industry average and the best-in-class offering, allowing users to evaluate a contract in the context of the broader market.

 

Best in Class and other Awards

At times, we’ll award our Best-in-Class designation or other awards to a company for having the most customer-favorable provision or contract of those we’ve reviewed in an industry.  Such awards are only given if a company meets the objectives or criteria described in the award using our rating methodology described above.

 

Disclaimer

Our summaries, ratings, and other components provide a way of getting a general feel for what’s in a company’s contracts, but we’re not perfect.  You may disagree with our weights, ratings, rating element assignments.  Something may be good or bad for an average customer, but not for you.  Ultimately, we designed this tool to be used with your attorney, not instead of your attorney.  We are not a law firm and are not a replacement for hiring an attorney.

 

Quality Control

We take quality extremely seriously.  In the unlikely event that you find an error in any of our reports, please report them to us immediately so that we can correct the mistake.

TermScout is a Techstars Portfolio Company
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