From a GC perspective, most obligation failures are boring, preventable, and expensive. They rarely come from exotic legal issues. They come from gaps between what the contract actually says, how the business operates, and how we track the work.

Here is how I would group the common causes, drawing on ACC guidance and recent enforcement patterns. I will also note where CLM tools help in my own day-to-day work, because a lot of this comes down to systems and discipline.

1. No single owner for the obligation

Many failures start with a basic governance problem: nobody clearly owns the obligation after signature. ACC’s framing of contract management as an enterprise process emphasizes that contracts need defined responsibilities and cross functional coordination, not just legal review and storage. The ACC contract management overview describes contract management as a lifecycle activity spanning the whole enterprise, with people, processes, policies, and technology tightly connected.

When ownership is fuzzy, obligations fall between teams. For example, security might assume privacy owns vendor audit rights. Finance might assume procurement owns price escalators. Legal might assume the business owner will track service credits. If nobody is accountable, nothing happens.

In my own environment, Concord helps by forcing us to assign owners in metadata and workflows, but the tool only works if we maintain the discipline to populate those fields and keep them current.

2. Weak connection between contract language and operational processes

Another common cause is the gap between paper and practice. Contracts contain obligations that never make it into playbooks, SOPs, or internal policies. ACC’s guidance on managing risk in commercial contracts notes that provisions on privacy, security, indemnities, and liability caps are only effective if the company understands the data, systems, and laws implicated by those terms, and can operationalize them. The ACC tips for managing risk in commercial contracts emphasize this connection between contract drafting and real-world implementation.

Regulators see the same gap. The SEC’s enforcement actions on cybersecurity and disclosure controls show companies promising controls they did not actually implement or monitor. The analysis of recent SEC cyber-disclosure actions in the Harvard Law School corporate governance forum highlights failures in maintaining adequate controls to back up public statements about risk and incident management.

When contract obligations are not mapped into internal processes, you end up with enforceable commitments that nobody is operationally honoring.

3. Poor visibility into vendor and data-processing obligations

Vendor and data-processing obligations are a recurring failure point. Regulators are now looking not only at what you do internally but also at how your vendors handle data and privacy rights. A recent California enforcement action summarized by Squire Patton Boggs shows the CPPA penalizing a company for, among other things, sharing personal information with vendors without contracts that contained the required privacy terms and failing to manage privacy rights requests through its vendors. The case summary in Privacy World’s CPPA enforcement update underlines the expectation that vendor contracts must include specific privacy commitments and that those commitments must be operationalized.

Similarly, SEC actions under Regulation S P show firms failing to follow their own policies on data handling, vendor oversight, and disposal of consumer information. The analysis of a Reg S P case in the Debevoise data blog notes that a vendor’s lack of experience in secure data disposal was flagged in risk assessments but did not affect vendor selection or oversight, which the SEC viewed as a failure of control.

These are obligation failures at the intersection of contract terms, vendor management, and privacy operations.

4. Recordkeeping and documentation gaps

Obligation failures often show up as recordkeeping failures. If you cannot prove that you did what the contract required, regulators will treat that as noncompliance. The SEC’s 2025 enforcement sweep against multiple broker dealer and adviser firms for recordkeeping violations is a good illustration. In that matter, the SEC described firms that admitted violating federal recordkeeping rules and agreed to substantial penalties. The SEC press release on the recordkeeping actions stresses that entities must maintain and preserve required communications and records in accordance with their legal obligations.

On the privacy side, enforcement summaries from Perkins Coie show regulators targeting companies for unreasonable data retention and misleading breach notices, which are essentially failures to follow through on stated retention and notification obligations. The Perkins Coie privacy enforcement recap notes that the FTC brought a case focused on unreasonable data retention and under-disclosed breach impacts.

These cases are reminders that obligations tracking is not just about knowing what you must do. It is about having systems and evidence to show that you did it.

5. Fragmented systems and manual tracking

From an operations point of view, many failures come from fragmentation. Obligations are scattered across email, spreadsheets, local drives, and multiple systems. ACC and its partners often highlight centralization and lifecycle tools as key to avoiding missed renewals, milestones, and compliance events. The ACC resource library is full of examples where centralizing contracts and approvals reduces process irregularities and improves auditability.

Third party guidance on contract risk management makes the same point. A recent contract risk guide from SafetyCulture describes contract risk management as a structured process of identifying, mitigating, and monitoring risks across the lifecycle, and explicitly notes that unclear obligations and poor tracking lead to financial, legal, and operational exposures. The SafetyCulture explanation of contract risk management emphasizes the need for clear obligations, responsibilities, and liabilities supported by systematic monitoring.

In my own team, moving to Concord as a centralized repository significantly reduced the number of “lost” obligations. But the bigger change came when we aligned reporting, alerts, and ownership fields so that key milestones and recurring duties are surfaced automatically, instead of being buried in static logs.

6. Misaligned contract terms and regulatory requirements

Another common failure is signing contracts that conflict with regulatory obligations. This can happen when commercial teams accept terms that push data handling, retention, or disclosure requirements out of sync with privacy or financial regulations. Commentary on privacy law enforcement notes that overbroad data sharing clauses, ambiguous third party processing terms, and unclear data retention periods can create inherent noncompliance risk. The analysis of conflicting contract terms in the Aaron Hall discussion of privacy regulations points out how contract language can undermine statutory privacy rights.

As more state privacy laws and sector-specific rules come online, the risk of signing incompatible obligations grows. The reality is that many obligation failures originate in the drafting and negotiation phase, when legal and compliance do not have proper visibility into the deal or are brought in too late.

7. Weak training and change management

Even well drafted and well tracked obligations will fail if the people responsible for them do not understand what is required. ACC’s content on contract approvals and lifecycle management repeatedly recommends periodic training for colleagues and management, including sharing audit findings and lessons learned, to keep the organization aligned on process and responsibilities. The ACC guidance on streamlining contract approvals describes training and feedback as core parts of a healthy approvals and governance model.

In practice, many obligation failures come from teams that never saw the contract, never received relevant training, or were never told that a new template introduced a new duty.

What this means for in-house teams

From where I sit as GC, the pattern is clear. Most obligation failures come from:

• Undefined or diffuse ownership.
• Poor translation of contract terms into operational processes.
• Weak vendor and privacy governance.
• Fragmented systems and manual tracking.
• Misalignment between contract terms and regulatory baselines.
• Inadequate training and feedback loops.

CLM tools help by centralizing contracts, standardizing fields, and supporting reminders and reporting, but they do not fix governance by themselves. The work is to combine ACC-style lifecycle thinking with real systems and clear accountability.

If you want obligations tracking to hold up under regulators, auditors, and counterparties, you need a contract operations model that treats obligations as living commitments with named owners, structured data, and evidence trails, not as boilerplate that disappears once the ink dries.