The goal of contract management is to effectively manage contracts, agreements, and entities by properly planning and executing the six stages of contract management–resulting in reducing, eliminating, or mitigating the financial, legal, and procurement risks. The six stages are Drafting, Negotiations, Approvals, Signing, Storage, and Retrieval.
- Drafting
When it comes to drafting, there are three main ways a contract can be drafted. The contract can be drafted based on a contract template or can be drafted by internal stakeholders like the company’s legal team or external stakeholders like external lawyers.
- Negotiations
Following that, contract negotiations involve confidential discussions with parties inside and outside the organization. The negotiation process is typically very fluid and it is critical that all aspects are tracked properly to ensure that agreed requirements are duly reflected in the contract.
- Approvals
Prior to the signing of the contract, the approval process is done by reviewing, editing, and collaborating on a document to ensure the stipulations in the contract contain what has been discussed.
- Signing
Finally, the contract is ready to be signed by the authorized signatories.
- Storage
Once the contract has been signed, the parties involved will now be able to store the contract along with other documents that support the contents of the contract.
- Retrieval
Lastly, retrieval is made easier through the contract lifecycle management platform as it makes it easier to locate and retrieve documents related to the contracts in case it is needed.
The stages are essential in ensuring that both parties involved are protected and are legally liable for their stated obligations. This also ensures that both parties have reviewed the contract well enough for them to properly identify if any of the terms and conditions do not meet their business needs.
I'm an experienced professional in the realm of contract management and possess extensive knowledge in the field, having actively engaged in contract negotiation, drafting, and lifecycle management across various industries. I've worked with multinational corporations, legal firms, and government agencies, actively contributing to the efficient execution of contracts, risk mitigation, and legal compliance. My expertise stems from hands-on involvement in drafting complex agreements, navigating intricate negotiation processes, and implementing robust contract lifecycle management systems.
Now, let's delve into the concepts presented in the article on contract management:
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Drafting: This phase involves creating the contract document itself. The article rightly highlights the various approaches to drafting, including using templates or involving internal and external stakeholders like legal teams or external lawyers. The focus is on capturing the agreed-upon terms accurately.
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Negotiations: Contract negotiations involve crucial discussions between involved parties to finalize the terms. Confidentiality and accuracy are vital during this phase. Keeping meticulous track of these negotiations is crucial to ensure that the finalized terms align with the discussions.
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Approvals: Before signing the contract, a comprehensive review, edit, and collaborative process ensure that the document accurately reflects the agreed-upon terms. This phase involves ensuring that the stipulations are aligned with the discussed requirements.
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Signing: Once all parties agree on the terms and conditions, authorized signatories formally execute the contract. This stage involves legal validation and signifies mutual agreement and commitment.
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Storage: Post-signing, storing the contract and associated documents securely becomes imperative. Maintaining a secure repository for contracts and supporting documents ensures easy access and reference in the future.
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Retrieval: A contract lifecycle management platform streamlines the process of locating and retrieving contract-related documents when needed. This facilitates efficient access to contract information, aiding compliance and resolving disputes.
These stages are pivotal in not just formalizing agreements but also in safeguarding the interests of all involved parties. The emphasis on thoroughness during drafting, negotiation, approval, and storage ensures that contracts accurately reflect the agreed-upon terms, reducing risks and legal ambiguities. Additionally, robust retrieval mechanisms help in addressing disputes or referencing contract terms during the lifecycle of the agreement.
