Are Companies Negotiating the Wrong Contract Terms?
- Last Updated: Nov 12, 2026
- 15 min read
- Sirion
What makes a contract successful? Is it the precision with which liability is defined, the clarity of its indemnity provisions, or the way it establishes responsibilities, performance expectations and commercial outcomes?
Ideally, all of these matter. Sirion’s latest research on contract negotiations in Contract Management Institute (CCMI), WorldCC, reveals an interesting imbalance between the terms organizations spend the most time negotiating and those that matter most once an agreement is in effect.
The report, Most Negotiated Terms 2026, reveals a pattern in contract negotiations that has remained remarkably consistent for more than two decades.
While terms like limitation of liability, price and indemnification continue to lead the list of most-negotiated terms, for both buyers and sellers, their rankings change considerably when measured against the terms that matter most during contract performance or generate the most disputes.
Limitation of Liability ranks ninth among the most important terms and does not feature among the top 10 most disputed. Indemnification, which ranks third in negotiation effort, is absent from both lists. Meanwhile, Scope, Delivery, Scope Changes, Payment and Service Levels feature prominently among the terms that matter during contract performance.
The difference raises a practical question: Are organizations giving enough attention to the terms that determine whether a contract delivers on its promise?
Two Kinds of Terms, Two Different Jobs
One explanation lies in the distinction between active and passive contract terms. Passive terms, such as Limitation of Liability and Indemnification, establish how responsibility is allocated when something goes wrong. They generally remain in the background until a failure occurs.
Active terms do a different job. Scope, Delivery, Payment and Service Levels require ongoing attention. They involve measurement, reporting, approvals, reviews and coordination between parties. They shape how the agreement works in practice and whether its commercial objectives are achieved.
Both categories are essential. But they cannot be managed in the same way.
A carefully negotiated liability clause establishes the boundaries of responsibility. It does not, on its own, ensure that delivery milestones are met, invoices are accurate or service levels are maintained. Those outcomes depend on clearly defined commitments and processes that continue well beyond the signing of an agreement.
This is where negotiation priorities become important.
Making Room for Performance and Collaboration
The report also highlights how little negotiating attention goes to the terms that support collaboration and stronger business relationships.
Across the terms studied, rights and obligations attract considerably more effort than collaboration and relational provisions. The average negotiation effort score is 2.3 for rights and obligations, compared with 1.6 for collaboration and 1.5 for relational terms.
Yet successful business relationships need more than clearly allocated responsibilities. They also need mechanisms for information sharing, forecasting, performance reviews, joint problem-solving and managing change.
Consider a supplier delivering a service against agreed business outcomes. Both parties need clarity on what is being delivered and who is responsible. But they also need to agree on how performance will be measured, how changing requirements will be handled and how issues will be resolved.
Without these provisions, even a well-negotiated contract can leave important aspects of the relationship undefined.
The opportunity is to bring these conversations into the negotiation itself, rather than leaving them to be worked out after signature.
An Informed Approach to Negotiation
Changing negotiation priorities starts with understanding where the effort currently goes.
Organizations need visibility into which terms are negotiated most frequently, which create friction and which have the greatest bearing on contract performance. Market benchmarks and historical negotiation data can help teams establish more balanced starting positions and avoid spending time revisiting issues where there is already broad agreement.
Contract performance data adds another important dimension. By feeding insights from executed agreements back into negotiation playbooks, organizations can make future decisions based on what actually happened, not just what was agreed in previous contracts.
This is also where AI can help. With access to structured contract data, negotiation history and performance context, AI can help identify patterns, inform negotiating positions and surface areas that deserve greater attention.
The objective is not to spend less time on risk or negotiate with less rigour. It is to make better use of negotiation time.
A successful contract does more than define what happens when things go wrong. It establishes the responsibilities, processes and shared expectations that help both parties achieve what they set out to do. The opportunity lies in giving those priorities the attention they deserve.
Where does your organization spend its negotiation time, and are those priorities helping deliver better outcomes?
Download the Most Negotiated Terms 2026 report, developed by the Commerce & Contract Management Institute in collaboration with Sirion, to explore the findings and discover what organizations can do to make negotiations more focused, collaborative and outcome-driven.
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