The psychology that makes people skip reading contracts – and how to change it

Why our brains resist legal documents and how overcoming our own cognitive distance solves the problem

Let's be honest — I've never met anyone who gets excited when receiving a contract. Imagine that moment when a 20-page document lands in your inbox and you feel your energy drain away. Last week I watched my friend literally groan out loud when he opened a service agreement. He immediately scrolled to the signature page without reading a single clause. He's not alone!

According to a study by Deloitte¹, roughly 91% of consumers accept terms and conditions without reading them. But why? Are we all just lazy? Turns out, there's fascinating psychology behind this behavior — and understanding it can completely transform how we approach contract design.

Cognitive distance: what it does and how we can fix it

After diving into research on this topic, I've become slightly obsessed with a concept called cognitive distance that explains exactly why our brains shut down when faced with contracts — and more importantly — how we can change that.

Cognitive distance is the gap between what contract creators intend to communicate and what readers actually understand. Think of it as the mental leap required to bridge the gap between legal language and everyday comprehension.

I first encountered this concept in a conversation with a legal design researcher who explained it like this: "The wider the cognitive distance in a document, the more mental energy is required to engage with it — and the more likely people are to disengage completely."

Why our brains reject contracts on sight

Ever wonder why you'll happily read a 30-minute news article but can't force yourself through a 5-page contract? It's not just boredom — it's your brain protecting you from what it perceives as unnecessary mental strain.

When we read through traditional contracts, several psychological barriers can immediately blur the intended meaning of the contract:

• Cognitive overload hits instantly. Our working memory can only handle so much information at once – around 4-7 chunks or bits of related data. Traditional contracts bombard us simultaneously with dense paragraphs, specialized terminology, complex sentence structures, and abstract concepts.
• Loss aversion kicks in. Our brains are wired to avoid potential losses more strongly than pursue gains. Contracts are perceived as minefields of potential obligations and restrictions — things we might lose or be bound by.
• Status quo bias makes us resist engaging. When something looks difficult, we tend to default to whatever requires the least mental effort. With contracts, the path of least resistance is usually to ignore the details and just sign.

Beyond that, cognitive distance occurs at many levels:

• Conceptual distance: The gap between abstract legal concepts and concrete real-world situations.
• Linguistic distance: The difference between specialized legal terminology and everyday language.
• Structural distance: The gap between how information is organized and how readers naturally process information.
• Experiential distance: The disconnect between the document and the reader's personal experience.

The wider these distances become, the more mental energy is required to process the information. When that energy requirement exceeds what feels reasonable, most people simply opt out.

Here's the fascinating part — cognitive distance isn't just some vague concept. It's measurable. And when you reduce it, engagement skyrockets.

How to measure cognitive distance in your contracts

You don't need fancy tools to audit the cognitive distance in your contracts. Here are some practical approaches anyone can use:

• The "explain it to me" test: Ask someone to read a section of your contract and then explain it back to you in his or her own words. The more the explanation diverges from the intended meaning, the greater the cognitive distance.
• Time-to-comprehension: How long does it take someone to understand key provisions? Longer times indicate higher cognitive distance.
• The "why" count: Have someone read your contract and count how many times you are asked, "why is this here?" or "what does this mean?" Each question signals cognitive distance.
• Reading abandonment: Track where readers stop engaging or skimming begins. These are the breaking points where cognitive distance becomes too great.

I tried this with my roommate using our apartment lease. Within just two paragraphs, he asked four times, "what does this mean?" and completely misunderstood a key provision about maintenance responsibilities. The cognitive distance was enormous.

Five strategies to dramatically reduce cognitive distance

Now for the good stuff! Here's how to bridge that gap and create contracts people actually read.

1. Visual hierarchy that guides the eye

Our brains process visual information far more efficiently than text. By using visual hierarchy techniques, you can dramatically reduce cognitive distance:

• Use headings and subheadings that actually explain content (not just "Section 4.2").
• Highlight key terms with consistent visual treatment.
• Create information groupings using white space, color coding, or boxes.
• Use icons to signal content categories (obligations, rights, processes, etc.).

I saw a service agreement recently that used a simple traffic light system (green/yellow/red) to indicate sections with different levels of negotiability. The cognitive distance immediately shrunk because readers could navigate with minimal mental effort.

2. Bridge conceptual gaps with real-world examples

One of the biggest contributors to cognitive distance is the gap between abstract legal concepts and how they play out in reality. Bridge this gap by:

• including brief examples next to complex provisions;
• creating what this means sidebars in plain language; and
• using scenarios to illustrate how provisions apply in practice.

3. Restructure information around user mental models

Most contracts are organized for the convenience of lawyers, not for the understanding of readers. Flip this by:

• organizing content around user scenarios rather than legal categories;
• placing most important information first, instead of burying it in section 14.3.2);
• grouping related concepts together even if they span different legal categories; and
• presenting information in the sequential order it would be encountered in reality.

I'm still amazed by a sales agreement I received that was organized around the customer journey rather than the traditional contract sections. The cognitive distance collapsed, because the structure matched how I naturally thought about the relationship.

4. Create linguistic bridges between legal and everyday language

Legal terminology creates enormous cognitive distance, but you can bridge this gap without sacrificing precision:

• Define terms where they are first used (not in a definitions section ten pages away).
• Pair legal terms with everyday language equivalents.
• Use consistent terminology throughout (avoid synonyms for legal concepts).
• Replace nominalizations with action verbs (such as, replace "provide notification" with "notify")

5. Reduce cognitive load through design decisions

Every design element either increases or decreases cognitive distance. Make conscious choices to reduce this overload:

• Break long paragraphs into shorter chunks.
• Use bullet points for lists (like I'm doing right now!).
• Increase white space to give the brain visual "rest."
• Remove unnecessary repetition.
• Use tables to organize complex relationships.

The beauty of these approaches is that none of them compromise legal effectiveness. You're simply removing barriers to understanding, not changing the substance.

The business case for reducing cognitive distance

This isn't just about making people happy — there are significant business benefits to reducing cognitive distance in contracts:

• Faster completion times: Contracts with lower cognitive distance get completed faster. One firm I spoke with reduced its contract completion cycle by 41 percent after redesigning for reduced cognitive distance.
• Fewer clarification requests: When people understand the first time, the back-and-forth disappears.
• Better compliance: People are more likely to comply with obligations they actually understand.
• Reduced dispute risk: Many disputes stem from misunderstandings that could have been prevented through clearer communication.
• Improved relationships: Contracts with low cognitive distance feel collaborative rather than adversarial.

As someone who's always been fascinated by the intersection of psychology and communication, discovering the concept of cognitive distance has completely changed how I view contracts. They're not just legal documents — they're psychological tools that either build or destroy understanding.

The companies that understand this shift aren't just creating better contracts — they're creating better business relationships. And that's something worth getting excited about.

So next time you're drafting or reviewing a contract, ask yourself: "How much cognitive distance am I creating here?" The answer might just transform your approach forever.

END NOTE

1. Deloite survey – AI Overview

References

Masson, M. E. J., & Waldron, M. A. (1994). Comprehension of legal contracts by non-experts: Effectiveness of plain language redrafting. Applied Cognitive Psychology, 8(1), 67–85. https://doi.org/10.1002/acp.2350080107

Passera, S. (2017). Beyond the wall of contract text: Visualizing contracts to foster understanding and collaboration across business functions. Aalto University Publication Series, Doctoral Dissertations, 134/2017. Retrieved from https://aaltodoc.aalto.fi/server/api/core/bitstreams/d443127e-f8af-463b-8447-c02cd3d682ff/content

Anonymous. (2021, July 9). Do we actually agree to these terms and conditions? Behind the Data: Humans and Values. Retrieved from https://blogs.ischool.berkeley.edu/w231/2021/07/09/do-we-actually-agree-to-these-terms-and-conditions/