(Newswire.net — October 10, 2017) — Prior to getting into the crux of the matter, it is important to understand what contract management actually is. It is basically a term that denotes all the contracts that a company enters into with its clients, vendors, workers, shareholders, and partners and how to manage all these contracts. It is undoubtedly an essential aspect in the functioning of a company. This is because at every level, regardless of whether the company is dealing with its customers or stakeholders, every single party has certain expectations and at every level there are risks, pricing, and stories of success and failure.
Whenever contracts or agreements are entered into, it offers insurance/assurance to all the parties involved that their investments are not at stake should any unexpected event strike or arises. The major benefits of using an agreement can be listed as below-
- The administrative costs are greatly reduced
- Every party involved is accountable
- Disputes and conflicts can be avoided in future
- Harmonious relation among all parties involved
- You know what the other partners or parties expect and the management of the company can act accordingly or as per the need of the hour.
Having cited the benefits of using contract management, next let us find out the different areas that need to be addressed in the contract.
Areas of the contract you must include
These are basically legal documents and have to be prepared by a legal professional that has the expertise to handle the same. The following aspects have to be taken into account, namely,
- Drafting the document
Drafting of the document is usually done by one that understands the modus operandi and business of the company very well. Most crucial and vital is incorporating the commercial terms in the document that has to be agreed upon by all parties. However, it has been observed that most of the drafting is usually done keeping in mind the interest of the company. The terms and conditions of the document should be such that it not only takes into consideration the present scenario of the company but also the future and the past trends.
- Document customization
In this regard, using an agreement template also known as contract template makes sense. It will not only allow for customization but also streamline the process. It is important that the template that you use is unique and not copied. Even if you do take an idea from another template, make sure you customize it as per your requirement as no two companies will need the same solution. What should you expect from these templates? The service provider’s template that you intend to use ought to offer the following options. They are as follows-
- The template should allow you to develop a standard agreement that can be done in multiple file formats, namely, PDF, Word, and more.
- The templates should allow you the provision of electronic signature.
Also referred to as agreement template, it must address the need of contractual workflow.
- Documentation management
This is also an important phase of any contract management. Whether or not any document is approaching its expiry period, needs renewal, and requires editing, is looked into by the document management team.
At any point of time, if any changes are required in the terms and conditions of the agreement has to be catered to as well. It is to be noted that even if there is change in price of services and goods the same has to be mentioned in the contract.
At any point of time, a company may have multiple contracts that are effective simultaneously. As such, managing all of them is a powerful task. As such, hiring the services of a legal firm definitely makes sense.