Legal design needed urgently to improve the quality of contracts and reduce risk

In her doctoral thesis Katri Nousiainen measures the impact and value of legal design in commercial contracting, and presents metrics and guidelines for evaluating efficiency and quality in legal products, services, and processes. 

"I am particularly interested in working at the intersection of technology, law and economics, law, and legal design." Nousiainen tells.

In her research, almost 62.5% of the respondents found a legal designed contract more understandable and clearer than a traditional legalese contract. In addition, preliminary results revealed that approximately 70% of participants found traditional legalese clauses unclear, ambiguous, and difficult to understand. Almost 90% of the participants stated that there is room for improvement in the clarity and comprehensibility of legalese clauses.

“Although it was a pilot study and a single experiment in a specific industry, the results are still very promising and support learning from other disciplines and applying their best practices to law. My research shows that legal design can be a useful scientific tool to improve legal quality and increase shared value”, says Nousiainen.

According to Nousiainen the results show that more comprehensibility is needed for negotiation and contract practices, as well as for the field of law in general.  For example, by making the wording of contracts clearer, we can reduce information asymmetry between contracting parties and improve legal quality.

“The research also has more far-reaching effects on negotiation and contract activities in general and especially on sectors in transition. Legal design can be one solution for increasing comprehensibility and transparency and supporting equality and ethics in society. Legal design can systematically empower people and reduce information asymmetry", Nousiainen concludes.

Katri Nousiainen's dissertation will be held on Wednesday, 21 June 2023 at noon, at Hanken School of Economics, Arkadiankatu 22, Helsinki. 

You can read the whole dissertation here: 
"Measuring the Impact and Value of Legal Design in Commercial Contracting within the Law and Economics Framework" Opens in new window