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Online Contracts

Imagine the contract process, without lawyers. Apparently, one Spanish startup, Negonation (here's a link to the company blog), has done just that, developing a system called Tractis, the first Web platform that lets users create, manage and execute contracts online, as reported in this article from Business 2.0 magazine (8/2/07). According to the article, Tractis is "stocked with a database of contract templates from around the world, and its contracts are legally enforceable in the offline world, even if the parties are in different countries." Tractis also includes a verification system for parties to verify identity (thus facilitating enforcement) and  will reimburse users who are victims of fraud as a result of using a valid online contract. Right now, Negonation is targeting higher-end eBay transactions, hoping that the added level of security provided by a separate contract will appeal to eBay users. 

But what I found most interesting was this description of the Tractis dashboard. Apparently,

the dashboard displays the entire timeline of negotiations, permissions, invitations, and comments. Users can invite other parties to edit working drafts, or lock others out of the negotiations. And contract templates include software licenses, rental agreements, warranties, and financial services.

So what are the prospects for Tractis in the lawyer-reliant business market? Will Tractis replace lawyer-drafted contracts or simply provide contracts for transactions where lawyers were never involved to begin with? It seems to me that Tractis and legal representation aren't mutually exclusive either: You could use the Tractis tools to negotiate contacts and track drafting changes while still represented by a lawyer.

Posted by Carolyn Elefant on August 2, 2007 at 06:47 PM | Permalink | Comments (1)


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