Diagrams in Contracts: Fostering Understanding in Global Business Communication

Abstract

Research problem: Business-to-business contracts are complex communication artifacts, often considered “legal stuff” and the exclusive domain of lawyers. However, many other stakeholders without a legal background are involved in the negotiation, drafting, approval, and implementation of contracts, and their contributions are essential for successful business relationships. How can we ensure that all stakeholders in the global business context—whatever their native language or professional background—easily and accurately understand contract documents? This study suggests that integrating diagrams in contracts can result in faster and more accurate comprehension, for both native and non-native speakers of English. Literature review: We focused on the following research topics: (1) ways to integrate text and visuals to create more effective instructions, since we conceptualize contracts as a type of business instructions; (2) cognitive load theory, as it may help explain why contracts are so hard to understand and why text-visuals integration may ameliorate their understandability; (3) cognitive styles, as individual differences may affect how individuals process verbal and visual information, thus allowing us to explore the limitations of our suggested approach; (4) the English lingua franca spoken by business professionals in international settings, their needs and challenges, and the fact that pragmatic approaches are needed to ensure successful communication. Methodology: We conducted an experiment with 122 contract experts from 24 countries. The research participants were asked to complete a series of comprehension tasks regarding a contract, which was provided in either a traditional, text-only version or in a version that included diagrams as complements to the text. In addition to measuring answering speed and accuracy, we asked the participants to provide information about their educational background, mother tongue, and perceived mental effort in task completion, and to complete an object–spatial imagery and verbal questionnaire to assess their cognitive style. Conclusions: We found that integrating diagrams into contracts supports faster and more accurate comprehension; unexpectedly, legal background and different cognitive styles do not interact with this main effect. We also discovered that both native and non-native speakers of English benefit from the presence of diagrams in terms of accuracy, but that this effect is particularly strong for non-native speakers. The implication of this study is that adding diagrams to contracts can help global communicators to understand such documents more quickly and accurately. The need for well-designed contracts may open new opportunities for professional writers and information designers. Future research may also go beyond experimental evaluations: by observing this new genre of contracts in vivo, it would be possible to shed light on how contract visualizations would be perceived and interpreted in a global communication environment.