Trusted Advisor to Banks and Credit Unions

A Short Study: A Trip to the Dentist or Reading Your Core Contract?

We found a fun infographic from the Visual Capitalist team we thought you might be interested in. It turns out that 97% of people do not read the terms and conditions of popular online services contracts before agreeing to them. And then we did a bit of research of our own about how this translates to a core software contract.

Visualizing the Length of the Fine Print, for 14 Popular Apps

How does this compare to the contracts your core provider offers, and do banks and credit unions actually read them thoroughly?

How long is a typical core contract?

To make it interesting, I asked one of my counterparts to send me one of the more cumbersome contracts she was working on, just so I could estimate the number of words and the time it would take to read it from start to finish.

She looked at me with a crooked smile like she was about to send me to a long visit to the dentist.

She sent me an email with 4 MB worth of attachments and explained the background to me.  The client signed their core master contract back in 2009.   They added some products, and completed an amendment to the master in 2016, and are now going through a second amendment in 2020 to again renew their contract and add additional products.

Here are the stats on the contracts she sent me, using the infographic’s estimate of 240 words of reading per minute:

  • The 2009 agreement was 44 pages at approximately 712 words per page, or roughly 31,328.  So, it should take 2 hours and 10 minutes of reading to go through the original contract.
  • The 2016 amendment was 72 pages, or approximately 51,264 words, another 3 hours and 36 minutes to get through that amendment.
  • The current agreement is 119 pages at 59,681 words for another 4 hours and 8 mins.

In total, 9 hours and 54 minutes of contract reading in three documents!   In that time, she could have read the Microsoft T&C’s (the longest found by the infographics team) nine times, and that doesn’t include the power naps she will likely need along the way. The result is much worse than a dental visit.

Related Article: Lessons Learned from a $130M Core Contract Negotiation

This is a bit of an extreme example because of the length of each document.  But suffice it to say, I have also never seen a contract with only two amendments.  Most clients get many more smaller amendments throughout their contract term as they purchase add-on products.

When we ask our clients why they do not know whether all of the items in their contract terminate at the same time, or how much they are paying for a specific product, no wonder that they are confused.  They fell asleep reading their core contract and wishing they were at the dentist.

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