Geopolitical disruption is exposing fundamental weaknesses in the way organisations design, negotiate and manage contracts, according to new research from World Commerce & Contracting (WorldCC).
The report, titled Contracting Under Geopolitical Uncertainty, found that 94 percent of surveyed organisations experienced some level of geopolitical disruption affecting supply chains or commercial relationships over the past 12 months.
Over a third (34 percent) describe the impact as “significant or severe”, with just six percent reporting no impact at all.
The findings suggest that many procurement and commercial functions remain ill-equipped for an operating environment increasingly defined by tariffs, regulatory fragmentation, political instability and supply chain volatility.
According to the report, contracts designed for stable trading conditions are proving inadequate in responding to modern disruption.
Researchers found that more than two-thirds of respondents (69 percent) believe their contracts offered little help in managing disruption, with common weaknesses including poor price adjustment provisions, inadequate risk allocation mechanisms, insufficient adaptation mechanisms for delays and altered requirements, and narrowly drafted force majeure terms.
The report argues that the problem extends beyond contract wording itself, with fragmented contracting processes, disconnected data systems and unclear ownership structures identified as major contributors to organisational vulnerability.
Respondents highlighted early-warning capability as the largest gap in their commercial operations.
WorldCC said many organisations still lack a clearly accountable owner for the contracting process, resulting in “confused roles, collective responsibility and too little accountability for quality or outcomes”.
The research also points to an increasing divergence between traditional procurement practices and the realities of today’s commercial environment.
Across its wider research, WorldCC has argued that contracts have increasingly become instruments of protection rather than vehicles for value creation, with procurement models overly focused on cost reduction, risk transfer and rigid standardisation.
Rather than relying on stricter legal protections, the report suggests organisations need to embrace more adaptive commercial systems that can identify risks early, improve internal coordination and enable faster decision-making.
The organisations best positioned to respond effectively were those combining flexible contract design with stronger governance structures, connected data and cross-functional collaboration.
Most disruption is ultimately resolved commercially rather than through legal enforcement, according to the report.
Companies were more likely to renegotiate terms, absorb costs or adjust delivery arrangements to preserve business continuity, with relationship quality, governance capability and leadership involvement all found to influence outcomes during periods of disruption.
The findings align with recent WorldCC research on procurement value leakage, which estimates that organisations lose an average of 11 percent of contract value due to poor governance, fragmented processes and weak post-award management.
The report concludes that resilience will increasingly depend not on tougher contractual clauses, but on commercially intelligent operating models capable of adapting to uncertainty.
It also points to AI-enabled contracting tools and improved data visibility as potential enablers of future resilience strategies.
