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Academic research and findings on an aspect of contract provisions – extensions and termination rights

Academics conduct research that makes me envious. Consider a detailed study of contracts described in the Acad. Mgt. Rev., Feb. 2011 at 182. Three professors studied 385 contracts Compustar had entered into with buyers of its IT services. (Of interest to me was the statement that lawyers negotiated none of the contracts; “lawyers conducted a final-stage review of the contracts” (at 200).) The article focuses on extendability and early termination provisions in the contracts. To research their effect, the authors coded a number of variables regarding the contractual arrangement and the contracting party. They then conducted regressions to find answers to their hypotheses.

My point here has only a little to do with what this particular empirical research can tell law department managers about contracting activities. My main point is that the methodology of data collection and analysis can uncover what is going on in the world far more insightfully and convincingly than the anecdotal sense of even the most experienced lawyer. Once you count it, analysis it, and run regressions coupled with causal relationships, you reach a much deeper understanding of whatever you study. Academics can do this and they publish their findings. This article illustrates the power of that approach.